A monopolistically competitive firm is currently producing the profit-maximizing level of output. If the price of a variable input increases, which of the following will occur?
(A) The firm will increase its output to increase its revenue.
(B) The firm will increase the price of its output by the same amount.
(C) The firm's average total cost and marginal cost curves will shift upward.
(D) The firm's average fixed cost will decrease as it decreases production.
(E) The firm's fixed cost will increase, but its output level will be unaffected.
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Home » Business » A monopolistically competitive firm is currently producing the profit-maximizing level of output. If the price of a variable input increases, which of the following will occur? (A) The firm will increase its output to increase its revenue.