The Figure Given Below Represents a Firm in a Market

Multiple Choice

The figure given below represents a firm in a market characterized by many buyers and one seller.MC represents the marginal cost, MR the marginal revenue, and D the demand curve of a firm.The firm is initially in equilibrium producing 6 units of output at a price of $10 per unit.


-Refer to Figure .Suppose the adoption of a new cost saving technology lowers marginal cost by $2 although the buyer's valuation remains unchanged.This allows the firm to produce 8 units of output at a price of $8 per unit.The profit earned by the firm will:

A) increase by $10.
B) decrease by $5.
C) remain unchanged.
D) increase by $5.