Assume there is an increase in the number of consumers in the market for a good sold by perfectly competitive 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 profit-maximizing quantity of output.
C
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The foreign exchange market is the market in which
A) the world's governments collect their tariff revenue. B) goods and services are exchanged between governments. C) the currency of one country is exchanged for the currency of another. D) all international transactions occur. E) currencies are exchanged solely by governments.
The CPI in Holland is 124, and the CPI in Israel is 186. If absolute purchasing power parity holds then the Euro/Shekel exchange rate should be
A) 0.667. B) 1.5. C) 2.6. D) cannot be determined by the information given.