Assume That a Firm Is Producing at Its Profit-Maximizing Level

Multiple Choice

Assume that a firm is producing at its profit-maximizing level of output. A decrease in fixed cost implies that:

A) marginal revenue will increase but marginal cost will decrease.
B) marginal revenue will not change but marginal cost will decrease.
C) neither average total cost nor marginal cost will change.
D) neither marginal revenue nor marginal cost will change.
E) both marginal revenue and marginal cost will decrease.