If the market price is $5 and a perfectly competitive firm is producing 1,200 units and the marginal cost to produce the 1,200th unit is $4.53, which of the following is true?
A) The firm is maximizing profit.
B) The firm should decrease production to maximize profit.
C) The difference between marginal revenue and marginal cost (MR - MC) for the 1,200th unit is negative.
D) The difference between marginal revenue and marginal cost (MR - MC) for the 1,200th unit is positive.
Correct Answer:
Verified
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