If a Competitive Firm Experiences a Shift in Costs of Production

question 31

Multiple Choice

If a competitive firm experiences a shift in costs of production that decreases marginal costs at all levels of output,

• A) expanding output levels at any given price will be profitable.
• B) producing less at any market price will off-set marginal cost .
• C) the firm's marginal cost curve will shift to the left.
• D) the firm's demand curve will also shift to the left.

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Definitions:

Work Inputs

The effort, time, and resources invested by employees in their work tasks.

Leaving the Situation

A conflict management or stress coping strategy involving physical or psychological withdrawal from a problematic scenario.

Performance

A measure of the efficiency and effectiveness of actions.

Equity Theory

A concept in social psychology that proposes individuals assess their own input and outcome ratios in relationships or situations to determine fairness.