A Competitive Firm Has Been Selling Its Output for $20

question 362

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 falls to $18, and the firm makes whatever adjustments are necessary to maximize its profit at the now-lower price. Once the firm has adjusted, its

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

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Definitions:

Usually Young

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Usually Men

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