In a perfectly competitive market, what happens to a firm's profit-maximizing level of output if the price of the product falls? * Because the firm maximizes profit by setting marginal revenue equal to marginal cost, an increase in the price of the product will reduce the firm's profit-maximizing level of output. Because the firm maximizes profit by setting marginal revenue equal to O marginal cost, a decline in the price of the product will not affect the firm's profit-maximizing level of output. Because the firm maximizes profit by setting marginal revenue equal to O marginal cost, a decline in the price of the product will reduce the firm's profit-maximizing level of output.

In a perfectly competitive market, what happens to a firm's profit-maximizing level of output if the price of the product falls? * Because the firm maximizes profit by setting marginal revenue equal to marginal cost, an increase in the price of the product will reduce the firm's profit-maximizing level of output. Because the firm maximizes profit by setting marginal revenue equal to O marginal cost, a decline in the price of the product will not affect the firm's profit-maximizing level of output. Because the firm maximizes profit by setting marginal revenue equal to O marginal cost, a decline in the price of the product will reduce the firm's profit-maximizing level of output.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Is my answer correct? i think you need information about the AVC to answer this question. I know the firm is productive at a loss, but in order to decide whether or not the firm should shut down, you have to know whether or not price is above or below AVC, right?
Please see the attached23
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Suppose the market for fresh pork is a competitive market. Initially, it is operatingat its long-run competitive equilibrium at a market price of $50.Owing to the spread of COVID-19, many people turn to buying frozen meat oncea week rather than fresh pork every day. As a result, the market price of fresh porkreduces to $30.a. With the aid of a pair of market-and-firm diagrams, illustrate how thiswould affect the equilibrium price and quantity in the fresh pork market andthe output of a typical butcher of fresh pork in the short-run.b. Suppose, for the situation in (a), the average cost of a typical butcher offresh pork is $40, which includes $15 on buying meat from suppliers, $12on paying rent, $8 on paying hourly wages on staff, and $5 on other costs.Explain whether a typical butcher should shut down in the short run.
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