Answer
When marginal revenue is less than marginal cost, the addition revenue for the production of the next good would be less than the additional cost that producing that good incurs, thus, when MR is less than MC, profit is not maximized, as there is more profit to be gained. If marginal cost is less than marginal revenue, the production of an addition unit of good would result in the additional cost being less than the addition revenue, and thus profit is not maximized here either, as profit is loss.
Work Step by Step
When an industry is purely competitive, the average revenue, marginal revenue and demand curve is a straight line, as these firms are price takers, thus, they would have to charge the equilibrium price that the market determines through the market forces of demand and supply. Thus, the marginal revenue curve can be substituted for the marginal revenue curve, as they are represented by the same curve
