Question

Mention the conditions needed for profit by a firm under perfect competition.

Answer 1

• The following conditions needed for profit by a firm under perfect competition:
• The price P must be equal to MC 
• Marginal cost must be non-decreasing at q₀ 
• The firm to continue to produce, in the short run, price must be greater than the average variable cost and in the long run, price must be greater than the average cost.