!!!!!perfectly competitive question!!!!?

In a perfectly competitive market the best option is always to produce where marginal benefit = Marginal revenue(or price in this case).

This is because to be producing more would mean marginal costs are exceeding the price. So producing that extra unit is costing more than the firm is receiving for it and profits start decreasing. Why would a firm willingly decrease its own profits?

The only option would be a decrease until it reached the point where MC = MR(or price in perfect competition)

Basically in a competitive markets, firms really cannot control the price as an increase in price would mean that people would turn to the other brands and a decrease in price would mean that the firm would not be making much of a profit, so all firms charge the market value. Marginal Cost is the cost of producing 1 more output of the good, and it is shown as a curve, producing in mass means that the more you produce, the cheaper it is, but eventually the cost will start to rise again, as producing more of the good will lead to more competition for resources, as resources will now become more scarce, and the price therefore will increase of resources. So basically, the marginal cost curve is a U shape. Marginal revenue is the revenue taken in of producing one more of the good, the extra revenue produced. As in a perfectly competitive maket, this should be a straight line, as the consumers are only willing to pay that one price. So therefore this will also show the demand for the good. Drawing these 2 curves will produce a diagram shown in source 1. Now we can draw an average cost curve on the diagram, which is found by dividing output by price. This will also be a U shape, as when produced in bulk, it will be cheaper to make more, although when you go over a certain point, resources become more competitive, and the price once again is dragged up. Source 2 shows the completed diagram. In the short-run, it is possible for an individual firm to make abnormal profit. This situation is shown in this diagram, as the price or average revenue, denoted by P is above the average cost denoted by C . Sorry if I've failed to answer the question properly, Im not to confident on the micro side of economics yet.