Assume That the Resource Market Is Purely Competitive

question 47

Multiple Choice

Assume that the resource market is purely competitive. If the price of the resource falls, other factors constant, then a firm that sells its product in a purely competitive market will

• A)increase production by a larger amount than a firm with some monopoly power in its product market.
• B)increase production by a smaller amount than a firm with some monopoly power in its product market.
• C)decrease production by a larger amount than a firm with some monopoly power in its product market.
• D)decrease production by a smaller amount than a firm with some monopoly power in its product market.

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