In the short run, a perfectly competitive firm's most profitable level of output is where:

Question

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In the short run, a perfectly competitive firm's most profitable level of output is where marginal cost equals marginal revenue. This is because at this level of output, the firm is producing where marginal revenue is equal to the additional cost of producing one more unit of output. Any increase in production beyond this point would result in a higher marginal cost than marginal revenue, reducing the firm's profits.

In the Short Run, a Perfectly Competitive Firm's Most Profitable