Question

1. In a pure competition market, producers should produce and sell where P=MC. Why? Why couldn’t they price their product above MC or wherever they want? Explain your reasons.

Answer 1

In a pure competition market, all products that being sold in that market is EXACTLY the same. None is worse and none is better.

In that condition, Buyers will make their decision based on price ( since all product's quality is possible)

That's why producers should sell where p=MC, which mean they should sell in the lowest price possible to be able to compete with other competitors