In Response to an Increase in the Market Demand, to Maximize

question 93

Multiple Choice

In response to an increase in the market demand, to maximize short- run profits, managers of perfectly competitive firms will______ _ production by employing______ inputs.

• A)increase; more fixed
• B)decrease; less variable
• C)increase; more variable
• D)decrease; less fixed

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Definitions:

Average Costs

The total costs divided by the total output produced, a measure of cost efficiency for production.

Social Welfare

A concept concerning the well-being, health, and economic security of society as a whole.

Synergies

The increased effectiveness or efficiencies created when two or more elements or companies work together.

Public Ownership

The ownership of industries and assets by the government or state, as opposed to private individuals or corporations.