Suppose the cost of insecticide (a variable input)decreases for broccoli farmers.In order to maximize profits,ceteris paribus,broccoli farmers should
A)Decrease output.
B)Keep output the same since the market price did not change.
C)Increase output.
D)Increase prices.

Question

Quizplus · Accepted Answer

With a decrease in the cost of insecticide, the marginal cost of producing each additional unit of broccoli decreases. This means that it becomes more profitable for farmers to increase their output, as they can make a higher profit margin on each unit sold without increasing their costs significantly. Therefore, the best choice for broccoli farmers to maximize profits would be to increase their output.

Suppose the Cost of Insecticide (A Variable Input)decreases for Broccoli