In the short run under perfect competition,an individual firm should increase output as long as

Question

Quizplus · Accepted Answer

In the short run under perfect competition, an individual firm should increase output as long as marginal revenue exceeds marginal cost. This is because the firm can earn additional profit by producing more and selling at the market-determined price, which translates to increasing their marginal revenue. However, if the marginal cost of production is higher than the marginal revenue, the firm will not be able to generate any additional profit, and as such, should not increase output beyond that point. Hence, choice A is the optimal choice.

In the Short Run Under Perfect Competition,an Individual Firm Should