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If production is occurring where marginal cost exceeds price, the purely competitive firm will __________.
A. maximize profit, but resources will be underallocated to the product.B. maximize profit, but resources will be overallocated to the product.C. fail to maximize profit and resources will be overallocated to the product.D. fail to maximize profit and resources will be underallocated to the product.

Respuesta :

Karabo99

Answer:

C. fail to maximize profit and resources will be overallocated to the product

Explanation:

At MC < P, the firm may earn profit but that is not maximum the maximu profit condition is that MR = MC and in perfect competition MR = P so MC = P is the maximum condition.

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