What happens if the firm increases its output even when $M R=M C$ ?
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Answer
In a situation when $M R=M C$, any increase in output would mean $M C>M R$. This is because $M R$ is assumed to be constant (as under perfect competition) and (at the point of equilibrium) MC is rising. It would be a situation when the difference between TR $(=\Sigma MR )$ and TVC $(=\Sigma MC )$ tends to reduce. Or, that the firm's gross profits start reducing.
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