In the Short-Run, If a Firm Increases Output When MR

question 86

Multiple Choice

In the short-run, if a firm increases output when MR > MC, then:

• A) profit will equal zero.
• B) profit will increase.
• C) profit will decrease.
• D) profit will remain the same.

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Definitions:

Real Wages

Wages adjusted for inflation, reflecting the actual purchasing power of income.

Output

The total quantity of goods and services produced by a business, industry, or economy within a specified period.

Competition

The rivalry among businesses or individuals for resources, customers, and market share.

High Wages

Refers to compensation levels that are significantly above the average for a job or industry, typically in response to skill shortages, high demand, or exceptional performance.