A Firm Facing a Downward Sloping Demand Curve Is Producing

question 24

Multiple Choice

A firm facing a downward sloping demand curve is producing a level of output at which price is $7,marginal revenue is $5,and average total cost,which is at its minimum value,is $3.In order to maximize profit,the firm should

• A)decrease price.
• B)keep price the same.
• C)decrease output.
• D)increase price.
• E)both c and d

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Definitions:

Multiplication

An arithmetic process that involves multiplying two numbers to achieve their resultant multiplication.

Evaluate

To determine or calculate the value of something.

Exponentiation

The mathematical operation involving the raising of one number to the power of another.

Division

A mathematics operation where a number is divided into parts or segments, represented by the division sign (/ or ÷).