Suppose that a firm is operating in a competitive market and producing a good that has a linear demand curve and constant marginal and average total cost. The market price is initially equal to the firm's marginal cost, so the firm is breaking even. Now suppose that the market price increases to a level above the firm's marginal cost, but below the firm's average total cost.

Question: How will the firm's profit-maximizing quantity of output change in response to the price increase? How will the firm's profit change?