Consequences of Deviating from Profit-Maximizing Price
A firm with the ability to set its own prices has identified its profit-maximizing level of output, where the revenue from the last unit sold exactly equals the cost of producing it. If this firm decides to increase its price from this optimal point, explain what happens to its total profit and why. In your explanation, describe the new relationship between the revenue gained from selling one more unit and the cost of producing one more unit.
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