14 Beef its whats for dinner

 Why does a perfectly competitive firm maximize revenues where P=MC? In these firms the price is set and there are a number of similar firms selling identical products and millions of buyers that know the price. My uncles beef business comes to mind. It all seems to be a bit of a gamble some might say an experiment. Produce enough of what you think will sell. There may be an uncertainty of total cost and a hesitation to produce more or less while testing how theses changes in production affect MC and MR. Happy being price takers.

Why is P=MR in this market type? MR exists because it is directly affected by the change in quantity produced in a fixed price scenario if one more product is sold MR will increase by the price of that item. So if a pound of ground beef is $5.00 and one pound is sold TR is $5 if another pound is sold for $5 TR is $10 MR is $5

Name a business you think belongs in this category.  My Uncles beef production business definitely belongs in this category. However his business is unique because he has always searched for a larger chunk of the market share. One would not think there is much to gain in that search. The interest in healthier beef lead the way. Beef is big business and when business was booming he stepped away and went another route. He switched from producing the massive standard beef production Hereford breed to the nearly unheard of Dexter breed. The Dexter is small in size yet yields a greater total beef volume for its size. In the process he reduced feed cost and space required for the smaller animal while producing more beef in the process. Additionally he sold land he no longer required or stopped leasing land he had for producing all the feed Herefords required to gain weight for market.

Farmers do not like change and they are not fond of the gamble. to many have tried and been burned. The play a bit as the market ebbs and flows but that is typically all. They will broadened their horizons a bit to see if something is there but that is about it. In my uncles case not only is he selling more beef he is selling that beef directly to restaurants in Chicago, at farmers markets and out of his barn for more per pound than the market. At this point he has not felt an affect of new market entrants because of farmers nature of avoiding change. However he is selling stock bulls to folks interested in the Dexter breed and educating folks on the transition.