Assume That the Resource Market Is Purely Competitive

Multiple Choice

Assume that the resource market is purely competitive. If the price of the resource falls, other factors constant, then a firm that sells its product in a purely competitive market will

A) increase production by a larger amount than a firm with some monopoly power in its product market.
B) increase production by a smaller amount than a firm with some monopoly power in its product market.
C) decrease production by a larger amount than a firm with some monopoly power in its product market.
D) decrease production by a smaller amount than a firm with some monopoly power in its product market.