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

Question

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If a firm is producing where marginal cost exceeds marginal revenue, it means that the additional cost of producing another unit is greater than the additional revenue earned from selling that unit. This indicates that the firm is not maximizing its profits. In order to increase profits, the firm should cut back production to the point where marginal cost equals marginal revenue, as this will ensure that the last unit produced adds more to revenue than it does to cost.

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