When the price level increases, firms in imperfectly competitive markets usually have a decrease in profit per unit and decrease output.

Question

Quizplus · Accepted Answer

When the price level increases, firms in imperfectly competitive markets often have the ability to raise prices, which can lead to an increase in profit per unit. They may adjust output based on demand and cost conditions, but an increase in price level does not inherently lead to a decrease in output.

When the Price Level Increases, Firms in Imperfectly Competitive Markets