If a firm expects that the price of its product will be lower in the future than it is today
A) the firm has an incentive to increase supply now and decrease supply in the future.
B) the firm has an incentive to decrease supply now and increase supply in the future.
C) the firm has an incentive to increase quantity supplied now and decrease quantity supplied in the future.
D) the firm will not change supply until it knows for certain what will happen to its price.
Answer: A
You might also like to view...
Travis always carries $100 in his wallet to pay for groceries. This is an example of the
A) precautionary demand for money. B) asset demand for money. C) transactions demand for money. D) wealth demand for money.
A meditation class meets on the second floor of a building; the first floor is a nightclub. The loud music from the club disturbs the classes. The club could be soundproofed for a cost of $5,000 or move at a cost of $8,000 . The class can't soundproof enough to overcome the music, but could be moved for $4,000 . According to Coase, a socially optimal solution can be achieved if
a. the local government purchases the building b. the building is torn down c. property rights to be noisy are granted to the nightclub d. property rights to a quiet environment are granted to the meditation class e. both the nightclub and the meditation class relocate
Which of the following features is associated with imperfect competition?
a. Homogeneity of products b. Positive economic profits c. Freedom of entry and exit d. Large number of firms
Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the
a. demand for flour to increase.
b. demand for flour to decrease.
c. supply of flour to increase.
d. supply of flour to decrease.