Firms in perfect competition False will match the market price to their marginal cost: they will sell more units as long as the market price is above their marginal cost, and stop when the market price equals or is below marginal cost For a firm in perfect True competition, the marginal revenue is seen to be the market price Free entry implies that False profits cannot be negative Free entry implies that False profits cannot be positive Free exit implies that profits True cannot be negative Free exit implies that profits False cannot be positive In the short run, profits for a False firm in a perfectly competitive market can never be too negative - they will never be less than minus the fixed cost In the long run, the market True price in a perfectly competitive market must equal the lowest possible everage most of production