The correct answer is "rising marginal costs".

Step 1: Understand the question. The question is asking about the behavior of an imperfect competitor when resource prices fall.

Step 2: Analyze the options.

- Falling marginal costs: This would imply that the competitor is more willing to employ resources and produce more output, which contradicts the question.

- Tendency to restrict output in the product market: This is a strategy that imperfect competitors might use, but it doesn't directly answer the question about the competitor's reluctance to employ more resources when prices fall.

- Rising marginal costs: This means that the cost of producing an additional unit of output is increasing. This would make the competitor less willing to employ more resources and produce more output, which aligns with the question.

- Marginal revenue first rising and then falling: This doesn't directly answer the question about the competitor's behavior when resource prices fall.

Step 3: Choose the correct answer. Based on the analysis, the correct answer is "rising marginal costs".

Question

The correct answer is "rising marginal costs".

Step 1: Understand the question. The question is asking about the behavior of an imperfect competitor when resource prices fall.

Step 2: Analyze the options.

- Falling marginal costs: This would imply that the competitor is more willing to employ resources and produce more output, which contradicts the question.

- Tendency to restrict output in the product market: This is a strategy that imperfect competitors might use, but it doesn't directly answer the question about the competitor's reluctance to employ more resources when prices fall.

- Rising marginal costs: This means that the cost of producing an additional unit of output is increasing. This would make the competitor less willing to employ more resources and produce more output, which aligns with the question.

- Marginal revenue first rising and then falling: This doesn't directly answer the question about the competitor's behavior when resource prices fall.

Step 3: Choose the correct answer. Based on the analysis, the correct answer is "rising marginal costs".

Knowee AI · Accepted Answer

The correct answer is "rising marginal costs".

Step 1: Understand the question. The question is asking about the behavior of an imperfect competitor when resource prices fall.

Step 2: Analyze the options.

- Falling marginal costs: This would imply that the competitor is more willing to employ resources and produce more output, which contradicts the question.

- Tendency to restrict output in the product market: This is a strategy that imperfect competitors might use, but it doesn't directly answer the question about the competitor's reluctance to employ more resources when prices fall.

- Rising marginal costs: This means that the cost of producing an additional unit of output is increasing. This would make the competitor less willing to employ more resources and produce more output, which aligns with the question.

- Marginal revenue first rising and then falling: This doesn't directly answer the question about the competitor's behavior when resource prices fall.

Step 3: Choose the correct answer. Based on the analysis, the correct answer is "rising marginal costs".

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