Suppose the firm's marginal cost of producing a can increases by $1 per can.Then,based on the figure above,the firm would

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If the marginal cost of producing a can increases by $1, the firm will need to increase its price to stay profitable or decrease its production. The firm will not completely stop producing cans (choice A), but it will decrease the amount it produces. This can be seen in the graph, where at the original equilibrium point, the firm produces 10 cans at a price of $8. If the marginal cost increases, the firm will need to increase its price to maintain profitability, which will result in a lower quantity demanded. As a result, the firm will need to decrease its production quantity to find a new equilibrium point at a higher price.

Suppose the Firm's Marginal Cost of Producing a Can Increases