单选题
A firm in a perfectly competitive market will tend to expand its output as long as: A. its marginal revenue is positive. B. the market price is greater than the marginal cost. C. its marginal revenue is greater than the market price.
【正确答案】
B
【答案解析】Under perfect competition, each firm faces a flat demand curve. This means the price is constant and the marginal revenue line is flat. A company will continue to produce as long as MR > MC, so the competitive company will produce as long as P > MC. It will stop when MC = MR = P.