In a situation when MR = MC and MC is rising thereafter, hence any increase in output would mean MC > MR. This is because MR is assumed to be constant (as under perfect competition). It would be a situation when the difference between TR and TVC tends to reduce or that the firm’s gross profit starts reducing. But if MR = MC and MC is falling then this signifies increased profits for the firm. So, by increasing its output, a firm may be able to super normal profits.