Firms may reasonably make a decision to cut prices if
A)profits are not likely to decline.
B)marginal profit is not negative.
C)MR MC.
D)All of the above are correct.

Question

Firms may reasonably make a decision to cut prices if
A)profits are not likely to decline.
B)marginal profit is not negative.
C)MR > MC.
D)All of the above are correct.

Quizplus · Accepted Answer

All of the above options are correct. A firm can cut prices if it does not expect a decline in profits, if the marginal profit is not negative, and if the marginal revenue is greater than the marginal cost. Therefore, all options are correct.

Firms May Reasonably Make a Decision to Cut Prices If