For a firm under PC profits are not maximized even when MR>MC.explain why

Dear Student,
If the firm is producing at a quantity where, MR>MC then it can increase output because the MR is exceeding the MC. And, if firm is producing at a quantity where MR<MC, then it can increase profit by reducing output because of reduction in MC will exceed the reduction in MR. The firm's profit maximizing choice of output will occur where MR=MC(or at a choice close to that point). That's why perfectly competitive firm maximises its profit only when MC=MR.


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in perfect compitition a producer is equilibrium when it fulfill both of the two condition : 1)MC=MR & 2) MC>MR after MC=MR It means that the MR is Maximum at point E(where MC & MR intersect) So the firm maximise its profit only when price equal to MC

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