If the firm is producing at a quantity of output where marginal cost exceeds mar

Question

If the firm is producing at a quantity of output where marginal cost exceeds marginal revenue, then the firm should reduce production O each marginal unit adds profit by bringing in more revenue than its cost O the firm's perceived demand will shift to the left O the excess proft would attract additional competition D Question 27 1 pts The demand curve for a firm in a perfectly competitive market is different from that of the entire market. The market demand curve firm's demand curve , while the perfectly competitive O is a horizontal line : slopes upward O slopes upward: is a horizontal line slopes downward : is a horizontal line

Explanation / Answer

Answer 26 : If firm is producing at the quantity of output, where Marginal cost exceed marginal revenue than the firm should reduce the production because here with additional unit of production it should produced losses. So, the ultimate decision is to reduce the production so that they dont face losses.

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Answer 27 : The demand curve for the firm in perfectly competitive is different from that of the entire market. The market demand curve  slopes downward, while the perfectly competitive firm demand curve is Horizontal line because as in perfect competiton the price elasticity of the demand is perfectly elastic and firm produced homogenous goods. Price are determined in the market and firm are price takers in the market.

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