Question

What conditions must hold if a profit-maximising firm produces positive output in a competitive market?

NCERT Class XII
Economics - Introductory Microeconomics

Chapter 4. The Theory of the Firm under Perfect Competition

Answer 1

When price remains constant firms can sell any quantity of output at the price fixed by the market.AR remains same at all levels of output and also revenue from every additional unit.(MR) is equal to AR it means ,AR curve is same as MR curve.Producer aims to produce that level of output at which Me equal to MR and Me is greater than MR after MC = MR output level.