If the price of the output of a profit-maximizing, competitive firm rises and all other prices stay constant, then the firm's output cannot fall.

Question

Quizplus · Accepted Answer

If the price of the output of a profit-maximizing, competitive firm rises, the firm will have a greater incentive to produce more output and increase profits. Therefore, the firm's output is likely to increase or stay the same, but it cannot fall due to the profit-maximizing behavior of the firm.

If the Price of the Output of a Profit-Maximizing, Competitive