Questions: Multiple Choice Question If a firm in a noncompetitive market wants to sell more units, it must raise the price for every unit it sells. it must reduce production costs. it must lower the price for every unit it sells. it is able to leave price unchanged.

The answer is: it must lower the price for every unit it sells.

Explanation for each option:

1. It must raise the price for every unit it sells.

   • This is incorrect. In a noncompetitive market, raising the price would typically lead to a decrease in the quantity demanded. To sell more units, the firm would need to make the product more attractive to consumers, which usually involves lowering the price, not raising it.

2. It must reduce production costs.

   • While reducing production costs can increase profitability, it does not directly affect the quantity of units sold. Lowering production costs can allow a firm to lower prices, but the act of reducing costs alone does not increase sales volume.

3. It must lower the price for every unit it sells.

   • This is correct. In a noncompetitive market, a firm typically faces a downward-sloping demand curve, meaning that to sell more units, it must lower the price. This is because consumers will only buy more if the price is reduced.

4. It is able to leave price unchanged.

   • This is incorrect. Leaving the price unchanged would not typically result in an increase in the quantity sold in a noncompetitive market. To increase sales, the firm usually needs to adjust the price downward to attract more buyers.