Final answer:
In a purely competitive industry, at the profit-maximizing or loss-minimizing level of output, marginal revenue is equal to marginal cost. Option B is correct.
Step-by-step explanation:
In a perfectly competitive industry, at the profit-maximizing or loss-minimizing level of output, marginal revenue is equal to marginal cost.
To understand this, let's consider a perfectly competitive firm that sells its product at a given market price. As the firm produces more units of output, its total revenue increases. However, the increase in total revenue for each additional unit sold is equal to the market price. This means that marginal revenue, which is the additional revenue generated from selling one additional unit, is equal to the market price.
At the profit-maximizing or loss-minimizing level of output, the firm produces where marginal cost is equal to marginal revenue (or market price). This ensures that the firm is producing the optimal level of output that maximizes its profits or minimizes its losses.