Do firms operate at MES or at the point of maximum profit?Watch
I'm confused because my textbook is saying that firms aim to operate at the MES, at which point costs are minimum and the firm is productively efficient. Yet, what if by expanding production further than the MES, their revenue increases further than does their costs? And, if they make this decision, do they no longer experience productive efficiency? Is this only possible in a non- perfectly competitive market?
I haven't started A2 economics yet so apoligies if I sound naive.
Thanks in advance.