A Competitive Firm Has Been Selling Its Output for $10

question 198

Multiple Choice

A competitive firm has been selling its output for $10 per unit and has been maximizing its profit.Then,the price rises to $14,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 marginal revenue is lower than it was previously.
• B) The firm's marginal cost is lower than it was previously.
• C) The firm's quantity of output is higher than it was previously.
• D) All of the above are correct.

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Ludus Style

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