If MR > MC for a Competitive Firm, It Should

question 86

True/False

If MR > MC for a competitive firm, it should reduce its level of output in order to make MR equal to MC.

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Definitions:

Firms

Business organizations engaged in professional, commercial, or industrial activities, aiming to generate profits.

Average Product

The average amount produced by each unit of a variable factor of production.

Marginal Product

The additional output that is produced by adding one more unit of a specific input, ceteris paribus.

Average Product

The output produced per unit of input used; calculated by dividing the total product by the quantity of inputs.