If a perfectly competitive firm is producing at a level where marginal revenue is less than marginal cost, what is the likely effect on the firm's profitability in the short run?

In a perfectly competitive market, firms aim to maximize their profits by producing where marginal cost equals marginal revenue. If a firm is producing at a level where marginal revenue is less than marginal cost, it means that the cost of producing one more unit is greater than the revenue it earns from selling that unit. This situation is not ideal because the firm is losing money on each additional unit produced. For example, if producing one more widget costs the firm $5 but it can only sell it for $4, the firm is losing $1 for that widget. Therefore, in the short run, the firm's profitability is likely to decrease, and it may need to reduce its output to improve its financial situation.