Brand X Is One of Many Firms in a Competitive

question 42

Multiple Choice

Brand X is one of many firms in a competitive industry where each firm has a constant marginal cost of 2 dollars per unit of output. If marginal cost for Brand X rises to 4 dollars per unit and marginal costs of all other firms in the industry stay constant, by how much does the price in the industry increase?

• A) 2 dollars
• B) 1 dollar
• C) 0 dollar
• D) 2/n , where n is the number of firms in the industry
• E) None of the above.

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Definitions:

Distinctiveness

Identifies the unique qualities or characteristics that set a person, object, or concept apart from others.

External Causes

Factors outside of an individual's or organization's control that can impact performance, outcomes, or operations.

Internal Causes

Factors within a person, such as attitudes, traits, or abilities, that influence their behavior.

Self-Fulfilling Prophecy

A belief or expectation that influences behaviors in a way that causes the belief to become a reality.