Manufacturers produce only what the market is willing to pay for.
Answer the following statement true (T) or false (F)
False
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On a graph, high correlation between the variable measured along the x-axis and the variable measured along the y-axis
A) means that changes in the variable measured along the x-axis must cause changes in the variable measured along the y-axis. B) means that changes in the variable measured along the y-axis must cause changes in the variable measured along the x-axis. C) means that changes in either variable must cause changes in the other variable. D) does NOT mean that a change in the variable measured along the x-axis must cause a change in the variable measured along the y-axis.
The profit-maximizing rule of production is to produce the level of output where price is equal to marginal cost. Since the marginal cost (MC) curve is U-shaped, the price line running horizontal to the X-axis intersects the MC curve at two points. How is the profit maximization rule applied in this case?
Assume that a country produces only cloth and rice. Cloth production requires significant amounts of labor and capital, but relatively less land. Assume that rice production requires relatively less labor and capital, but relatively large amounts of land. If there is an increase in the country's endowments of capital and labor, the Rybczynski theorem predicts that:
A. the production of cloth will increase, but that of rice will remain unchanged. B. the production of both rice and cloth will increase. C. the production of cloth will increase, but that of rice will decline. D. the production of rice will increase, but that of cloth will remain unchanged.
Which of the following is true in the long run?
What will be an ideal response?