The deep state entered Americaâs national discourse in 2017 with the feeling of an already familiar character, ready to assume a starring role as hero or villainâdepending on how you feel about Trump.
If a firm produces past that point, then marginal revenue is less than marginal cost. This means that the firm is losing profit with each additional unit of output and it should produce less. Remember that a competitive firm has a flat MR curve which is equal to the market price.
In this exercise it will be assumed that average cost is equal to marginal cost. This means that price = marginal revenue = average cost = marginal cost. From our profit maximizing condition, the firm should operate where marginal revenue = marginal cost.