A Firm in a perfectly competitive market invents a new method of production that lowers its marginal cost. What happens to its output? What happens to the price of charges? A profit-maximizing firm compares the marginal revenue received from output sold with the marginal cost of producing it. If marginal revenue equals marginal cost, then the firm produces the profit-maximizing output quantity. If marginal revenue is less than marginal cost, then it can boost profit by increasing production. If marginal revenue is greater than marginal cost, then it can boost profit by decreasing production. A. The firm has an employee who threatens to tell all other firms in the industry about how to implement this new technique. Will it be possible to bribe the employee not to do this? Why or why not? I don’t know it would be possible for the firm to bribe the employee unless they were under a contractual agreement with him/her. For example: my husband company makes their employees sign a no compete policy. The employee cannot take any patent that they have implemented nor can they speak of any patents or services that were implemented. B. Why should this employee probably choose to tell only some of the other firms rather than all of them? He would only loose his leverage by telling all of the firms. If he/she wanted to make money and keep a good reputation with these companies he has given this secret to he must limit his transaction to only a few firms to keep the perfect competitive market growing. C. What factors will determine the best number of firms to sell the secret to? (Assume that those who get the information keep the secret instead of selling it to others). The factors that will determine the best number of firms to sell the secret to would be based on how many firms are in that particular business and who will be willing to pay a significant price for