If a firm in a perfectly competitive market is producing at a level of output where marginal cost exceeds marginal revenue, it:

Name: If a firm in a perfectly competitive market is producing at a level of output where marginal cost exceeds marginal revenue, it:
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Question

Quizplus · Accepted Answer

When marginal cost exceeds marginal revenue, the firm is producing beyond the profit-maximizing level of output. By cutting back production to the point where marginal cost equals marginal revenue, the firm can increase its profits.

If a Firm in a Perfectly Competitive Market Is Producing