Post Utme Elizade University 2023 Economics Question 6

Practice objective / multiple choice question 6 from the 2023 Post Utme Elizade University Economics examination.

Post Utme Elizade University 2023 Economics Objective / Multiple Choice
Question 6 POST_UTME_ELIZADE_UNIVERSITY • 2023 • ECONOMICS • objective

Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at point A, and the price elasticity of demand (PED) at point A is 2, what is the likely effect on the firm's output and price?

Answer Options

A. The firm will increase its output and lower its price.
Correct Answer B. The firm will decrease its output and lower its price.
C. The firm will increase its output and raise its price.
D. The firm will decrease its output and raise its price.
Correct Answer
B
Correct Option:
The firm will decrease its output and lower its price.

About This Question

This is Post Utme Elizade University 2023 Economics Question 6. It is one of the objective questions from the 2023 Post Utme Elizade University Economics examination.

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