Exhibit 8-12 If the market price rises, the profit maximizing level of output in Exhibit 8-12 will

Question

Exhibit 8-12  If the market price rises, the profit maximizing level of output in Exhibit 8-12 will

Quizplus · Accepted Answer

According to the graph, the marginal cost curve intersects the marginal revenue curve at an output level of 12. If the market price rises, the marginal revenue curve will shift upwards, causing the profit-maximizing output level to increase. This can be seen from the fact that the new point of intersection between the marginal cost and revenue curves will occur at a higher level of output. Therefore, the profit maximizing level of output will increase.

Exhibit 8-12 If the Market Price Rises, the Profit