In Response to an Unexpected Change in Demand, If the Prices

question 2

Multiple Choice

In response to an unexpected change in demand, if the prices are free to adjust quickly:

• A)a firm could always operate at its optimal output level.
• B)a firm would experience a decline in its output and employment.
• C)a firm would not be able to adjust its output according to the plan.
• D)a firm would not be able to change its employment accordingly.

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Definitions:

Scarce Resources

Resources that are limited in availability, meaning they cannot meet all the demands placed on them.

Consenting Individuals

Persons who have given permission for something, especially in a legal or formal context.

Ideal Conditions

Circumstances or situations that are considered perfect or optimal for a certain process or experiment to occur.

Efficiency

The extent to which a process or intervention produces a desired effect or outcome with a minimum amount of waste, expense, or unnecessary effort.