If the market price is $1 and a perfectly competitive firm is producing 1,500 units and the marginal cost to produce the 1,500th unit is $2, the difference between marginal revenue and marginal cost (MR - MC)is negative.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the marginal revenue (MR) equals the market price, which is $1 in this case. Since the marginal cost (MC) to produce the 1,500th unit is $2, MR - MC = $1 - $2 = -$1, which is negative.

If the Market Price Is $1 and a Perfectly Competitive