In the Short Run, Firms Expand Their Production When the Price

question 272

Multiple Choice

In the short run, firms expand their production when the price level rises because

• A) firms can increase their profits by increasing their maintenance.
• B) the money wage rate remains constant so the higher prices for their product makes it profitable for firms to expand production.
• C) the higher prices allow the firm to hire more workers by offering higher wages, thereby increasing productivity and profits.
• D) each firm must keep its production up to the level of its rivals, and some firms will expand production as the price level increases.

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Definitions:

Social Venues

Places or settings where people gather for social interactions, such as parties, clubs, community centers, or public events.

Value-Expressive Influence

The effect on consumer behavior driven by the desire to express one's self-concept through the use of products or brands.

Referential Influence

The impact that the opinion of others has on an individual's choice or behavior, typically within a social context.

Informational Influence

The effect that the knowledge, opinions, or behaviors of others can have on one’s own responses, often leading to conformity due to the desire to be correct.