Assume That a Firm Is Producing at Its Profit-Maximizing Level

question 20

Multiple Choice

Assume that a firm is producing at its profit-maximizing level of output. A decrease in fixed cost implies that:

• A) marginal revenue will increase but marginal cost will decrease.
• B) marginal revenue will not change but marginal cost will decrease.
• C) neither average total cost nor marginal cost will change.
• D) neither marginal revenue nor marginal cost will change.
• E) both marginal revenue and marginal cost will decrease.

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