Suppose the Equilibrium Price in a Perfectly Competitive Industry Is

question 175

Multiple Choice

Suppose the equilibrium price in a perfectly competitive industry is $15 and a firm in the industry charges $21.Which of the following will happen?

• A)The firm's profits will increase.
• B)The firm's revenue will increase.
• C)The firm will not sell any output.
• D)The firm will sell more output than its competitors.

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Definitions:

Raw Materials

These are the basic, unprocessed materials used in the manufacturing of goods, which may include metals, plastics, wood, or chemicals depending on the final product.

Production Department

The division within a company that is focused on the actual manufacturing or production of goods.

Indirect Labor

Wages paid to employees who are not directly involved in production, but support the manufacturing process.

Production Department

A specific area or segment of a manufacturing company responsible for the actual production of goods.