-In the above figure, what happens to the firm's optimal level of output if the price it receives for its product increases from P₂ to P₃?

Question

Quizplus · Accepted Answer

When the price increases from P2 to P3, the firm's marginal revenue increases, leading to a higher optimal level of output as the firm seeks to maximize profit by producing where marginal cost equals the new, higher marginal revenue.

-In the Above Figure, What Happens to the Firm's Optimal