The graph above represents Aruna's situation. Pottery Plus has two rival firms. Aruna is convinced that she dare not raise her price because her rivals will not raise their prices, and she dare not decrease her price because her rivals will simply match her lower price. a. What price does Aruna charge? b. What quantity does she produce? |units produced c. If her marginal costs are MC1 is she producing the optimal output? (Click to select) v d. If her marginal costs increase to MC2 will she reduce her output? (Click to select) v

The graph above represents Aruna's situation. Pottery Plus has two rival firms. Aruna is convinced that she dare not raise her price because her rivals will not raise their prices, and she dare not decrease her price because her rivals will simply match her lower price. a. What price does Aruna charge? b. What quantity does she produce? |units produced c. If her marginal costs are MC1 is she producing the optimal output? (Click to select) v d. If her marginal costs increase to MC2 will she reduce her output? (Click to select) v

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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