Question

A shift of the marginal-cost curve from MC2MC_2 to MC1MC_1 in graph (b) would:

a. increase the “going price” above P0P_0.

b. leave price at P0P_0 but reduce this firm’s total profit.

c. leave price at P0P_0 but reduce this firm’s total revenue.

d. make this firm’s demand curve more elastic.

Solution

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Answered 7 months ago
Answered 7 months ago
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In this multiple choice question, we are asked to determine how a shift in the marginal cost curve in Figure 11.4(b) will affect the market.

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