Asked by
Rajat Malhotra
on Dec 11, 2024
Verified
A price-taker firm will tend to expand its output so long as its
A) marginal revenue is positive.
B) marginal revenue is greater than the market price.
C) marginal revenue is less than the market price.
D) marginal cost is less than the market price.
Price-taker Firm
A firm that has no control over the market price and must accept the prevailing market price for its products.
Marginal Revenue
The extra revenue generated by the sale of an additional unit of a product or service.
Marginal Cost
The cost of producing one additional unit of a product or service.
- Apply the principle of marginal revenue and marginal cost to decision-making in price-taker markets.
Verified Answer
SG
Learning Objectives
- Apply the principle of marginal revenue and marginal cost to decision-making in price-taker markets.