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Asked by alexandrra jaranilla on Jul 11, 2024

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Perfectly competitive firms will produce as long as marginal revenue exceeds marginal cost.

Marginal Revenue

The additional income generated from selling one more unit of a product is known as marginal revenue.

Marginal Cost

The financial impact of producing an extra unit of a product or service.

Perfectly Competitive Firms

Firms that operate in a market where no single buyer or seller has the power to influence the price of the product, and where the product offered is homogeneous, with many sellers and buyers.

  • Comprehend the importance of marginal cost in achieving maximum profits for companies operating in perfectly competitive environments.
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Shubhangi BharadwajJul 12, 2024
Final Answer :
True
Explanation :
In a perfectly competitive market, firms will continue to produce output as long as the marginal revenue (MR) they receive from selling an additional unit of a good or service is greater than the marginal cost (MC) of producing that additional unit. This is because producing up to the point where MR = MC maximizes the firm's profit.

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