If a profit-seeking competitive firm is producing its profit-maximizing output and its total fixed costs fall by 25 percent,the firm should:

A) use more labor and less capital to produce a larger output.
B) not change its output.
C) reduce its output.
D) increase its output.

Total Fixed Costs

Costs that do not vary with the level of output or sales in the short term, including expenses such as rent, salaries, and insurance.

Profit-seeking

The pursuit of activities that are expected to result in financial gain or increased profitability.

Profit-maximizing Output

The level of production at which a company can achieve the highest level of profit given its costs and the market price of its product.