The following graph shows the marginal revenue (MR) and marginal cost (MC) curves of an imperfectly competitive firm. Figure 8.2
-Refer to Figure 8.2.At a quantity of 10 the firm should _____ ,but at a quantity of 75 the firm should _____.
A)leave production unchanged; also leave production unchanged
B)leave production unchanged; decrease production
C)increase production; decrease production
D)increase production; leave production unchanged
E)decrease production; increase production

Question

The following graph shows the marginal revenue (MR) and marginal cost (MC) curves of an imperfectly competitive firm. Figure 8.2  
-Refer to Figure 8.2.At a quantity of 10 the firm should _____ ,but at a quantity of 75 the firm should _____.
A)leave production unchanged; also leave production unchanged 
B)leave production unchanged; decrease production 
C)increase production; decrease production 
D)increase production; leave production unchanged 
E)decrease production; increase production

Quizplus · Accepted Answer

At a quantity of 10, the firm is producing below its profit-maximizing output, so it should increase production. At a quantity of 75, the firm is producing above its profit-maximizing output, so it should decrease production.

The Following Graph Shows the Marginal Revenue (MR) and Marginal