If a perfectly competitive firm is producing a quantity where MC > MR,then profit:

A) is maximized.
B) can be increased by increasing production.
C) can be increased by decreasing production.
D) can be increased by decreasing the price.

Question

Justin Michael · Accepted Answer

Final Answer : C, Explanation :  When MC > MR, it means that the cost of producing one more unit is greater than the revenue gained from selling that additional unit. Therefore, the firm is producing too much and should decrease production to maximize profit. By decreasing production, the firm can reduce its costs and increase its overall profit.

If a perfectly competitive firm is producing a quantity where MC > MR,then profit:

A) is maximized.
B) can be increased by increasing production.
C) can be increased by decreasing production.
D) can be increased by decreasing the price.

Definitions

Learning Objectives

Learning Objectives

Related questions

If a perfectly competitive firm is producing a quantity where MC > MR,then profit:A) is maximized.B) can be increased by increasing production.C) can be increased by decreasing production.D) can be increased by decreasing the price.

Definitions

Learning Objectives

Learning Objectives

Related questions

If a perfectly competitive firm is producing a quantity where MC > MR,then profit:

A) is maximized.
B) can be increased by increasing production.
C) can be increased by decreasing production.
D) can be increased by decreasing the price.