The figure above shows a firm's marginal revenue and marginal cost curves.
-Suppose the firm's marginal cost of producing a can increases by $1 per can.Then the firm would

Question

Quizplus · Accepted Answer

When the marginal cost of producing a can increases by $1, the firm's marginal cost curve will shift upwards by $1. This means that the firm will now incur an additional cost of $1 for each unit of output. The intersection of the new marginal cost curve with the original marginal revenue curve will occur at a lower level of output, which means that the firm will decrease the amount of cans it produces to reduce its costs. However, since the marginal revenue curve is still above the new marginal cost curve, the firm will continue to produce some level of output and not shut down completely.

The Figure Above Shows a Firm's Marginal Revenue and Marginal