A perfectly competitive firm is producing at the point where its marginal cost equals its marginal revenue. If the firm boosts its output, its total revenue will ________ and its profit will ________.

Question

Quizplus · Accepted Answer

In perfect competition, marginal cost equals marginal revenue at the profit-maximizing output. Increasing output beyond this point raises total revenue but increases costs more, reducing profit.

A Perfectly Competitive Firm Is Producing at the Point Where