For a firm in a perfectly competitive market,if it produces where marginal cost exceeds marginal revenue:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a firm's profit-maximizing quantity is where marginal cost equals marginal revenue. If a firm produces where marginal cost exceeds marginal revenue, it means that the cost of producing an additional unit of output is higher than the revenue gained from selling it. This would lead to a net loss for the firm, so it should cut back production to increase profits.

For a Firm in a Perfectly Competitive Market,if It Produces