Answered: A competitive firm can increase profit…

A competitive firm can increase profit by_____________________if marginal cost exceeds price. Answers: A. Cutting output B. Raising its price C. Making no change in output D. Raising output

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 1CQQ

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Concept explainers

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?

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A competitive firm can increase profit by_____________________if marginal cost exceeds price.


Answers:	A. Cutting output
	B. Raising its price
	C. Making no change in output
	D. Raising output

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