Asked by
Yessika Rodriguez
on Nov 04, 2024
Verified
An individual wheat farmer produces wheat in a perfectly competitive market. A decrease in the market demand for wheat will cause the farmer's marginal revenue to ________ and his profit-maximizing level of output to ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Marginal Revenue
Marginal Revenue is the additional income generated from selling one more unit of a good or service.
Profit-maximizing Level
The point at which a business achieves the highest profit, where marginal cost equals marginal revenue.
Market Demand
The sum of all the quantities of a good or service demanded per period by all the households buying in the market for that good or service.
- Analyze how changes in market demand and supply affect firm profits in perfect competition.
- Discern the connection among marginal cost, marginal revenue, average total cost, and the strategizing for maximum profit.
Verified Answer
CC
Learning Objectives
- Analyze how changes in market demand and supply affect firm profits in perfect competition.
- Discern the connection among marginal cost, marginal revenue, average total cost, and the strategizing for maximum profit.
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