For a perfectly competitive firm, which of the following is not true at profit maximisation?
A)Market price is greater than marginal cost.
B)Marginal revenue equals marginal cost.
C)Total revenue minus total cost is maximised.
D)Price equals marginal cost.

Question

Quizplus · Accepted Answer

In perfect competition, firms maximize profits where marginal revenue equals marginal cost. Since the marginal cost curve often increases with output, the price must exceed marginal cost for the firm to earn profits. Therefore, A is not true at profit maximization.

For a Perfectly Competitive Firm, Which of the Following Is