Question

in the state of equilibrium price higher than marginal cost is ruled out for a perfectly competitive firm.show that Diagramaticlly

Answer 1

It is essential to know the meaning of firm and industry before analysing the two. Firm is an organisation which produces and supplies goods that are demanded by the people with the goal of maximising its profits.

According to R.L.Miller, “Firm is an organisation that buys and hires resources and sells goods and services.” To Lipsey, “Firm is the unit that employs factors of production to produce commodities that it sells to other firms, to households, or to the government.”