Use the figure to answer the following question(s).
Figure 9-6
-If the market price in Figure 9-6 increases to $20, what should the firm do?
A) produce an output of 15
B) expand output to 20
C) expand output to 25
D) increase its price to $25

Question

Use the figure to answer the following question(s).
Figure 9-6 
-If the market price in Figure 9-6 increases to $20, what should the firm do?
A) produce an output of 15 
B) expand output to 20 
C) expand output to 25 
D) increase its price to $25

Quizplus · Accepted Answer

If the market price increases to $20, the firm should expand output to the level where marginal cost equals the new market price, which is likely at an output of 20.

Use the Figure to Answer the Following Question(s)