The main reason that firms adjust their output when the price level changes is that
A. uncertainty causes a drop in output.
B. taxes cause a supply-side reaction.
C. their profit margins change.
D. increased risks lead to a change in output.
E. All of these responses are correct.
Answer: C
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What will be an ideal response?
Refer to Table 3-2. The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market. If the price of cashews rises from $4 to $6, the market quantity demanded would
A) decrease by 39 lbs. B) increase by 33 lbs. C) decrease by 33 lbs. D) increase by 39 lbs.
In the above figure, a regulation requiring average cost pricing would force the firm to produce at output level
A) Q1. B) Q2. C) Q3. D) Q4.
If a consumer is buying only two goods, A and B, then he or she will be in equilibrium only when MUa = MUb
a. True b. False Indicate whether the statement is true or false