Because of a Decrease in the Wage Rate It Must

question 119

Multiple Choice

Because of a decrease in the wage rate it must pay, a perfectly competitive firm's marginal costs decrease but its demand curve stays the same. As a result, the firm

• A) decreases the amount of output it produces and raises its price.
• B) increases the amount of output it produces and lowers it price.
• C) increases the amount of output it produces and does not change its price.
• D) decreases the amount of output it produces and lowers its price.

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Definitions:

Prepaid Expense

An expense that has been paid in advance and is recorded as an asset until it is actually incurred.