A decrease in the price a firm receives for its output will lead the firm to:
A)expand output.
B)cut its payments to its factors of production.
C)leave output unchanged.
D)reduce output.

Name: A decrease in the price a firm receives for its output will lead the firm to: A)expand output. B)cut its payments to its factors of production. C)leave output unchanged. D)reduce output.
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Question

Quizplus · Accepted Answer

As price increases, a profit-maximizing firm will reduce output down to the point where marginal cost is again equal to price.

A Decrease in the Price a Firm Receives for Its