As long as it does not shut down, a perfectly competitive firm earns the maximum profit as long as it operates so that

Question

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A perfectly competitive firm maximizes profit where marginal revenue (MR) equals marginal cost (MC) because any deviation from this point would either reduce profit or lead to loss. As long as the firm's marginal cost does not exceed its price, it will continue to earn positive economic profit. However, if the price falls below the average total cost, the firm would begin incurring losses and would eventually shut down. Market demand or elasticity does not affect the firm's ability to maximize profit as it is a price taker and cannot influence the market price.

As Long as It Does Not Shut Down, a Perfectly