Knowing That in the Real World, the Demand for Goods

question 23

Multiple Choice

Knowing that in the real world, the demand for goods and services could change unexpectedly, firms would attempt to deal with it by:

• A)producing different levels of goods and services according to the changes in demand.
• B)switching to the production of another product in the short-run.
• C)maintaining an inventory.
• D)closing down the production in the short-run with the hope that the situation would change in the future.

---

Definitions:

Substitutes

Goods or services that can be used in place of each other, fulfilling the same needs or desires.

Complements

Goods or services that are used together, where the use or consumption of one enhances the use or consumption of the other.

Law Of Supply

The Law of Supply states that, all else being equal, an increase in price results in an increase in the quantity supplied.

Quantity Supplied

The supply of a good or service that businesses intend to sell, given a certain price point.