Can there be a positive level of output that a profit maximising firm produces in a perfectly competitive market at which market price is not equal to marginal cost ? Explain.

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 perfectly competitive market at which market price is not equal to marginal cost ? Explain.
Answer» SOLUTION :No, it is not POSSIBLE because MR = MC or P = MC is necessary condition for a perfectly competitive market to be in EQUILIBRIUM. If MR/P gt MC, there are more PROFITS possible and if P/MR lt MC, then there are LOSSES.