If the Producers of a Product Do Not Respond to Price

question 21

Multiple Choice

If the producers of a product do not respond to price changes at all, then an increase in demand results in

• A)no change in price but a large increase in equilibrium quantity.
• B)an increase in price but no change in equilibrium quantity.
• C)as much an increase in price as in equilibrium quantity.
• D)no change in both price and equilibrium quantity.
• E)a large increase in price and a large decrease in equilibrium quantity .

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Definitions:

Current Year

Refers to the present calendar or fiscal year in which a business or entity operates.

Direct Material B

Direct Material B pertains to specific raw materials or components designated with a "B" classification, used directly in the production of goods.

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not yet been sold.

Raw Materials Inventory

The total cost of all the components kept in stock that are used in the production process.