Can there be a positive level of output that a profit-maximising firm produces in a competitive market at whichmarket price is not equal to marginal cost ? Give an explanation.

Can there be a positive level of output that a profit-maximising firm

1.	Can there be a positive level of output that a profit-maximising firm produces in a competitive market at whichmarket price is not equal to marginal cost ? Give an explanation.
Answer» Solution :No. it is not possible as equality between market price and marginal cost is a NECESSARY CONDITION for perfectly COMPETITIVE firm to be in EQUILIBRIUM. (It must be NOTED that market price is equal to marginal revenue when price remain constant at all outputlevels, i.e., in caseof perfect competition.)