For a perfectly competitive firm with a known marginal cost and random demand, as the expected marginal revenue decreases, the profit- maximizing quantity ________ .

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For a perfectly competitive firm, the profit-maximizing quantity is where marginal cost equals marginal revenue. As the expected marginal revenue decreases, the firm is facing a less favorable market, which means it will earn less revenue at each quantity sold. Since the marginal cost is constant, it will still intersect with the decreasing marginal revenue curve at a lower quantity, resulting in a decrease in profit-maximizing quantity.

For a Perfectly Competitive Firm with a Known Marginal Cost