In a competitive market, a large number of producers compete with each other to satisfy the needs of their consumers. In here, no one or group of producers can dictate the price. They have only one major decision to make—and that is, what quantity to produce. Therefore, when Tom decided to produce commemorative t-shirts, and decrease his output, This decision did not increase his revenue, since did not lead to higher market price nor the competitors will decrease their output. The answer is C. decrease his revenue, for price remains the same.
Answer would be C, Decrease his revenue, since his output has decreased and the price remains the same.
Tom produces commemorative t-shirts in a competitive market. If he decided to decrease his output, this will decrease his revenues since his output has decreases and the price remains the same.
When there is a decrease in the quantity of a product produced by the company, the revenues will also decrease because when more quantity is sold, more revenue is generated and vice versa, keeping the price at a constant number.
