If marginal cost becomes higher than price, what happens to a company? a. the company will lose money on each additional unit produced b. company specialization will lower the actual price changed c. diminishing margininal returns will shrink d. the company will go out of business

A is the correct answer.

If marginal cost is higher than the price that a company is charging, then the firm will lose money until it adjusts the price of the item to reflect the change in marginal cost. Price should always be higher than marginal cost, unless the firm is putting in place a strategy to drive competitors out and then reestablish pricing schemes.

A GRADPOINT

this null effect is caused by a weak manipulation and ineffective internal validity. in a scientific study, as the one dr. morimoto is trying to perfom, internal validity refers to the confidence placed in the cause-effect relationship and to how well an experiment is done and able to eliminate confounding variables.