Assume there is a decrease in the market demand for a good sold by price-taking firms that are initially producing the profit-maximizing level of output. For the individual firm, this would result in:
A) a decrease in both price and the profit-maximizing quantity of output.
B) a decrease in price and increase in the profit-maximizing quantity of output.
C) an increase in both price and the profit-maximizing quantity of output.
D) an increase in price and decrease in the profit-maximizing quantity of output.
A
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Sam's manufacturing plant recently decided to pay its workers 14% more than the current market wage for equivalent skills. Such a management decision can be due to
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