A Competitive Firm Has Been Selling Its Output for $10

question 319

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, its

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

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