With an increase in income, we can predict that a consumer will choose a new market basket on a lower indifference curve. on the same indifference curve but the new budget line. on a higher indifference curve that is tangent to the new budget line on a higher indifference curve that passes through the new budget line.

Suppose farmer lane grows and sells cotton in a perfectly competitive industry. the market price of cotton is $1.64 per kilogram, and his marginal cost of production is $1.44 per kilogram, which increases with output. assume farmer lane is currently earning a profit. can farmer lane do anything to increase his profit in the short run? farmer lane: a. cannot do anything to increase his profit. b. may or may not be able to increase his profit. c. can increase his profit by raising his price. d. can increase his profit by producing more output. e. can increase his profit by shutting down.