If a Producer Knew His Product to Be an Inferior

question 136

Multiple Choice

If a producer knew his product to be an inferior good and he also knew average household income was falling,he might

• A)decrease output because the demand for his product would rise.
• B)increase output because the demand for his product would rise.
• C)keep his output the same.
• D)cut output immediately because the demand for his product would surely fall.
• E)close down,because inferior goods are the first to be eliminated from household budgets when income falls.

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Definitions:

Avoidance-Avoidance Conflict

A psychological conflict that arises when an individual is forced to choose between two equally unattractive options.

Negative Outcomes

Results of actions or events that are unfavorable, harmful, or contrary to desired objectives.

Forcing Conflict-Management Style

A direct and assertive approach to dealing with conflicts, where one tries to win the situation at the potential expense of others.

Solution

A means of solving a problem or dealing with a challenging situation.