In perfectly competitive markets, firms operate where MC = MR and because of this, they are not making any economic profit.

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In perfectly competitive markets, firms operate where marginal cost (MC) equals marginal revenue (MR) to maximize profits, but this does not necessarily mean they are not making any economic profit. Economic profit can be positive, zero, or negative depending on the market conditions and the position of the average total cost curve relative to the market price.

In Perfectly Competitive Markets, Firms Operate Where MC = MR