Suppose your firm operates in a perfectly competitive market and decides to double its output. How does this affect the firm's marginal profit?
Please provide the answer& proper explanation in word format not in hand writing format
A) Marginal revenue and marginal cost increase
B) Marginal revenue increases but marginal cost remains the same
C) Marginal cost may change but marginal revenue remains the same
D) Marginal revenue and marginal cost decrease
Answer
option C
C) Marginal cost may change but marginal revenue remains the same
A perfectly competitive firm is a price taker so the marginal revenue is the same as price and the price is equal to the marginal revenue at all levels of output so the MR does not change
MC may change if the variable inputs of productions have diminishing returns to labor otherwise it will not change.
Suppose your firm operates in a perfectly competitive market and decides to double its output. How...
Suppose your firm operates in a perfectly competitive market and decides to double its output. How does this affect the firm's marginal profit? Select one: a. Marginal revenue and marginal cost increase b. Marginal revenue increases but marginal cost remains the same C. Marginal cost may change but marginal revenue remains the same d. Marginal revenue and marginal cost decrease
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Please explain the process to solve these
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a firm in perfectly competitive market sells all its products
Q at constant price p
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