Use the following diagram to answer the following questions.

-Refer to Diagram 5-1. If a competitive firm were currently producing output at Q₃, we know that:

Question

Use the following diagram to answer the following questions.
 
-Refer to Diagram 5-1. If a competitive firm were currently producing output at Q₃, we know that:

Quizplus · Accepted Answer

If a competitive firm is producing output at Q₃, it is producing beyond the point of profit maximization, where marginal cost exceeds marginal revenue. Therefore, decreasing output to Q* would increase profits.

Use the Following Diagram to Answer the Following Questions