Because firms in perfectly competitive markets can sell any quantity without driving down prices, they should:

Question

Quizplus · Accepted Answer

In perfectly competitive markets, firms maximize profits by producing until the marginal cost (MC) of producing an additional unit equals the market price (P), which is the point where the additional profit earned on the last unit sold is zero. This ensures they are not producing too much (which would increase costs without increasing profits) or too little (which would mean missing out on profitable sales).

Because Firms in Perfectly Competitive Markets Can Sell Any Quantity