Multiple Choice
Due to an increase in the price of a competitor's product, the demand for a firm's product increases sharply. How is this most likely to affect the firm's marginal revenue and marginal cost?
A) Marginal revenue will increase but marginal cost will decrease.
B) Both marginal revenue and marginal cost will not be affected.
C) Both marginal revenue and marginal cost will increase.
D) Marginal revenue will not change but marginal cost will increase.
E) Marginal revenue will increase but marginal cost will not change.
Correct Answer:
Verified
Correct Answer:
Verified
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