Assuming the perfectly competitive firm is experiencing diminishing marginal returns to its variable factors of production,as output price rises,the firm will:

Question

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The rule for profit maximization follows from the cost-benefit principle: continuing doing something so long as the marginal benefit is greater than the marginal cost.If the marginal benefit (price)increases,the firm should produce more.

Assuming the Perfectly Competitive Firm Is Experiencing Diminishing Marginal Returns