Answer to Question #209852 in Microeconomics for marya

Question #209852

The rule for profit maximization in all market structures is: MC=MR. Explain why price

can be substituted for MR when an industry is purely competitive?


1
Expert's answer
2021-06-24T10:11:36-0400

In perfect competition, a producer faces a market price that is equal to its marginal cost. This implies that the factor price equals the factor marginal revenue of the product.


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