If average cost is increasing as more units are produced, then marginal cost must be a. rising b. falling c. constant d. above average cost e. below average cost 2. The marginal cost of output a. equals variable costs divided by the amount of output. Each seller produces the same good. There are many buyers and sellers. In order to sell more output, a firm must lower price.
Marginal revenue equals price.
If a competitive firm has marginal revenue less than marginal cost, it should a. leave output the same. Earn zero economic profits 9. Sue owns a firm in a perfectly competitive industry that is characterized as being a high-risk industry. Given the firm's isoquant, they choose to use 5 workers and 10 machines to maximize their profits. A. 3 workers and 11 machines B. 4 workers and 9 machines C. 5 workers and 7 machines D. 6 workers and 5 machines.