If a perfectly competitive firm's marginal revenue is less than its marginal cost,the firm

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When a perfectly competitive firm's marginal revenue is less than its marginal cost, it means that the additional revenue earned from selling one more unit is less than the additional cost of producing that unit. Therefore, the firm is not maximizing its profits. By decreasing its output, the firm can reduce its production costs and increase its profit margin. This is because if the firm continues to produce at the same level, it will incur losses. Therefore, the best option for a perfectly competitive firm in this case is to decrease its output to increase its economic profit.

If a Perfectly Competitive Firm's Marginal Revenue Is Less Than