A perfectly competitive firm is now producing a quantity of output at which its marginal cost is higher than both its average total cost and the market price. What would happen to price and output if the firm chose to maximise its profit?
- Aeffect on output: decrease; effect on price: increase
- Beffect on output: decrease; effect on price: unchanged
- Ceffect on output: increase; effect on price: decrease
- Deffect on output: increase; effect on price: unchanged