If a perfectly competitive firm produces the level of output at which MC MR, it will benefit by reducing production volume.

Name: If a perfectly competitive firm produces the level of output at which MC > MR, it will benefit by reducing production volume.
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Question

If a perfectly competitive firm produces the level of output at which MC > MR, it will benefit by reducing production volume.

Quizplus · Accepted Answer

When a firm in perfect competition produces at a level where Marginal Cost (MC) is greater than Marginal Revenue (MR), reducing production will decrease costs more than revenues, thus increasing profit.

If a Perfectly Competitive Firm Produces the Level of Output