00:01
Yes, so a perfectly competitive firm will produce up to the point where its marginal cost is going to be equal the market price p, which is also its marginal revenue.
00:15
And this is because price equals marginal revenue.
00:19
Well, in a perfectly competitive market, the price is given and cannot be influenced by a single firm due to the large number of firms producing identical products.
00:29
So every additional unit of output sold brings in revenue equal to the market price, where we have that p is equal to the marginal revenue.
00:45
And then for profit maximization, well, to maximize its profit, a firm should produce up to the point where the additional cost of producing one more unit, the marginal cost, equals the additional revenue obtained from selling that unit, the marginal revenue.
01:06
And if we have marginal cost less than marginal revenue, the firm can increase its profit by producing more...