Answer to Question #48826 in Microeconomics for Lisa

Question #48826
Since firms operating in a perfectly competitive market can sell as much as they produce at the market price, they should produce as much as they can. True or false.
1
Expert's answer
2014-11-12T13:22:12-0500
Even if firms operating in a perfectly competitive market can sell as much as they produce at the market price, they should't produce as much as they can. Because if the firm wants to maximize their profits, it should produce the amount of output, for which marginal revenue equals marginal cost and equals the equilibrium price, so MR = MC = P.
That's why this statement is false.

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