The following graph shows the marginal revenue (MR) and marginal cost (MC) curves of an imperfectly competitive firm.Figure 9.2

-Refer to Figure 9.2. At a quantity of 10 units, the firm should _____ , and at a quantity of 75 units, the firm should _____.
A)leave the level of production unchanged; also leave production unchanged
B)leave the level of production unchanged; decrease production
C)increase production; decrease production
D)increase production; leave production unchanged
E)decrease production; increase production

Question

The following graph shows the marginal revenue (MR) and marginal cost (MC) curves of an imperfectly competitive firm.Figure 9.2
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-Refer to Figure 9.2. At a quantity of 10 units, the firm should _____ , and at a quantity of 75 units, the firm should _____.
A)leave the level of production unchanged; also leave production unchanged 
B)leave the level of production unchanged; decrease production 
C)increase production; decrease production 
D)increase production; leave production unchanged 
E)decrease production; increase production

Quizplus · Accepted Answer

At a quantity of 10 units, the firm is producing at a loss, so it should increase production to move closer to the profit-maximizing quantity. At a quantity of 75 units, the firm is producing at a profit, but it could increase its profit by decreasing production to move closer to the profit-maximizing quantity.

The Following Graph Shows the Marginal Revenue (MR) and Marginal