A Competitive Firm Has Been Selling Its Output for $20

question 362

Multiple Choice

A competitive firm has been selling its output for $20 per unit and has been maximizing its profit, which is positive. Then, the price falls to $18, and the firm makes whatever adjustments are necessary to maximize its profit at the now-lower price. Once the firm has adjusted, its

• A)quantity of output is lower than it was previously.
• B)average total cost is lower than it was previously.
• C)marginal cost is higher than it was previously.
• D)All of the above are correct.

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Definitions:

Restatement Second Torts

A legal document summarizing the general principles of American tort law, including definitions and conceptual distinctions.

Strictly Liable

A legal term indicating the responsibility for damages or injury, regardless of fault or intent, usually applied in cases involving inherently dangerous or defective products or activities.

Res Ipsa Loquitur

A legal doctrine that allows an inference of negligence to be drawn from the very nature of the accident or injury, in the absence of direct evidence on how any defendant behaved.

Animal Trap

A device designed to capture or kill animals, typically used for hunting, pest control, or wildlife management purposes.