Originally Posted by bignasty

Not sure that that is a valid argument. First of all, movies and cars(the writer's examples) are not homogeneous products. They are differentiated, and therefore not subject to the forces of a perfectly competitive market. Products that are subject to perfectly competitive markets are things such as wheat, milk, etc. Goods that you can't really tell apart. A good rule of thumb is if it's advertised, it's not in a perfectly competitive market. Perfectly competitive markets can produce short run profits, but break even in the long run. This is in terms of economic profit, not accounting profit. While it is true that all markets find optimal quantity at mc=mr, there is still a profit made. mc=mr just means that if you produce more then your total profit will decrease. You still have a profit on each unit before the optimal quantity. If that quantity is 10,000 you made marginal profit on each of the 9,999 that preceded that last unit. This is because of decreasing marginal returns. As you add inputs, the amount of production achieved per additional input added decreases, which raises the marginal cost. The writer says that car makers will try to differentiate to keep from getting marginal cost. The simple fact is that the car maker is trying to get to that point, as that point represents the highest profits he can realize. Whoever wrote that article needs to retake basic microeconomics.

Edit to add
It's not that the market pushes prices to marginal cost, it's that producers produce until the marginal cost equals the price of the good. His thinking is backwards. Producers produce until it cost that amount to produce one more. Not that price goes to mc.