Post Utme Madonna University 2018 Economics Question 25

Practice objective / multiple choice question 25 from the 2018 Post Utme Madonna University Economics examination.

Post Utme Madonna University 2018 Economics Objective / Multiple Choice
Question 25 POST_UTME_MADONNA_UNIVERSITY • 2018 • ECONOMICS • objective
Post Utme Madonna University 2018 Economics Question 25 diagram

A monopolistically competitive firm is producing a good with a demand curve that is downward sloping. The firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at point E. What is the likely effect of an increase in the price of the good on the firm's profit-maximizing output?

Answer Options

A. The firm will increase its profit-maximizing output.
Correct Answer B. The firm will decrease its profit-maximizing output.
C. The firm will not change its profit-maximizing output.
D. The firm will increase its profit-maximizing output, but only temporarily.
Correct Answer
B
Correct Option:
The firm will decrease its profit-maximizing output.

About This Question

This is Post Utme Madonna University 2018 Economics Question 25. It is one of the objective questions from the 2018 Post Utme Madonna University Economics examination.

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