Imagine a firm in a competitive market comes up with a new production method, which halves its marginal cost atall levels of Q. Fixed costs are unaffected. Which of the following statements are true?O a. The firm's AC at all levels of Q would be lower.O b. The firm would extract an innovation rent from selling at the market price with lower costs.Oc. The firm's point of minimum AC would be a higher level of Q.O d. The innovation would immediately cause the market price to drop.

In a competitive market, when the marginal cost falls by halves then it implies that the firm has…

Imagine a firm in a competitive market comes up with a new production method, which halves its marginal cost at all levels of Q. Fixed costs are unaffected. Which of the following statements are true? O a. The firm's AC at all levels of Q would be lower. b. The firm would extract an innovation rent from selling at the market price with lower costs. Oc. The firm's point of minimum AC would be a higher level of Q. O d. The innovation would immediately cause the market price to drop.

Imagine a firm in a competitive market comes up with a new production method, which halves its marginal cost at all levels of Q. Fixed costs are unaffected. Which of the following statements are true? O a. The firm's AC at all levels of Q would be lower. b. The firm would extract an innovation rent from selling at the market price with lower costs. Oc. The firm's point of minimum AC would be a higher level of Q. O d. The innovation would immediately cause the market price to drop.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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