for their service, so independent trucking does seem to have most of the characteristics of perfect

competition.

3. Holding total cost constant, profits at every output level would increase.

4. When the market price increases, marginal revenue increases. The firm would then increase production

up to the point where the new price equals marginal cost, at a quantity of 90.

5. If marginal costs exceeds marginal revenue, then the firm will reduce its profits for every additional unit of

output it produces. Profit would be greatest if it reduces output to where MR = MC.

6. The firm will be willing to supply fewer units at every price level. In other words, the firm’s individual

supply curve decreases and shifts to the left.

7. With a technological improvement that brings about a reduction in costs of production, an adjustment
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