If a Price Searcher Is Producing at a Level of Output

question 156

Multiple Choice

If a price searcher is producing at a level of output such that its marginal cost is $5 and its marginal revenue is $3, the firm should

• A) increase output in order to reduce per-unit costs.
• B) decrease the price of its product and expand output.
• C) increase price and reduce its rate of output.
• D) reduce both price and output.

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Definitions:

Sound Waves

Sound waves are vibrations that travel through the air or another medium, which can be heard when they reach a person's or animal's ear, characterized by their frequency, wavelength, and amplitude.

Frequency

The rate at which a vibration occurs that constitutes a wave, either in a material (as in sound waves), or in an electromagnetic field (as in radio waves and light).

Pitch

Refers to the perceived frequency of a sound, determining how "high" or "low" it sounds.

Middle Ear

The air-filled space behind the eardrum that contains the tiny auditory bones responsible for transmitting sound from the outer ear to the inner ear.