A Competitive Firm Has Been Selling Its Output for $20

question 374

Multiple Choice

A competitive firm has been selling its output for $20 per unit and has been maximizing its profit,which is positive.Then,the price rises to $25,and the firm makes whatever adjustments are necessary to maximize its profit at the now-higher price.Once the firm has adjusted,which of the following statements is correct?

• A) The firm's quantity of output is higher than it was previously.
• B) The firm's average total cost is higher than it was previously.
• C) The firm's marginal revenue is higher than it was previously.
• D) All of the above are correct.

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Definitions:

Derivative Action

A lawsuit brought by a corporation shareholder against the directors, management, or other shareholders of the corporation for a failure in duty that harmed the corporation.

Oppression Remedy

A legal remedy designed to protect minority shareholders in a company from unfair treatment or abusive actions by majority shareholders or the company's directors.

Shareholders' Agreement

A contract among the shareholders of a company that specifies their rights, obligations, and the company's operational procedures.

Special Act Corporation

A corporation that is created by a specific act of a legislature, tailored for a particular purpose or corporation.