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:

Trade

The exchange of goods or services between individuals, businesses, or countries.

World Price

The worldwide market rate of a product or service, shaped by the global conditions of supply and demand.

Import

The act of bringing goods or services into one country from another for sale or use, which can impact domestic markets and industries.

Export

The act of selling goods or services produced in one country to another country.