Suppose a price taker is collecting $1,999 in total revenue and the total cost of its fixed factors of production decreases from $500 to $400.One can speculate that the firm will

Question

Quizplus · Accepted Answer

With the decrease in the cost of fixed factors of production, the firm's total cost will decrease, thereby increasing its profit or decreasing its loss. As the firm is a price taker, it cannot increase its price. It may choose to increase its output, but this cannot be determined solely based on the given information. Therefore, the best choice is that the firm will earn a higher profit or a smaller loss.

Suppose a Price Taker Is Collecting $1,999 in Total Revenue