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Figure: Costs and Profits for Tomato Producers
-(Figure: Costs and Profits for Tomato Producers)Use Figure: Costs and Profits for Tomato Producers.The market for tomatoes is perfectly competitive.The market price of a kilogram of tomatoes is $18.If the market price increases to $20,the farmer's marginal revenue _____ and the profit-maximizing output _____.

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Use the following to answer questions :
Figure: Costs and Profits for Tomato Producers 
-(Figure: Costs and Profits for Tomato Producers)Use Figure: Costs and Profits for Tomato Producers.The market for tomatoes is perfectly competitive.The market price of a kilogram of tomatoes is $18.If the market price increases to $20,the farmer's marginal revenue _____ and the profit-maximizing output _____.

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In a perfectly competitive market, marginal revenue is equal to price, so if the market price increases from $18 to $20, the farmer's marginal revenue will increase. To maximize profits, the farmer should increase production until marginal cost equals marginal revenue. Since marginal revenue has increased, the profit-maximizing output will also increase. Therefore, the correct answer is A.

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