Refer to the graphs above. Suppose a firm is currently producing 500 computers per week and charging a price of $1000. How will the firm respond to a negative demand shock if prices are flexible?
A.
The firm will continue to produce 500 computers per week and charge a price of $600
B.
The firm will continue to produce 500 computers per week and charge a price of $1200
C.
The firm will cut production to 300 computers per week and charge a price of $1000
D.
The firm will cut production to 300 computers per week and charge a price of $600
A.
The firm will continue to produce 500 computers per week and charge a price of $600
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