When the Price Level Increases, Firms in Imperfectly Competitive Markets

question 256

True/False

When the price level increases, firms in imperfectly competitive markets usually have a decrease in profit per unit and decrease output.

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Definitions:

Capital Goods

Long-term assets used by businesses to produce goods and services, such as machinery, buildings, and equipment.

Consumer Goods

Products bought by the final consumer for personal use.

Law of Increasing Opportunity Costs

An economic principle that states as production of a good or service increases, the opportunity cost of producing another unit also increases.

Particular Good

A specific item or product that satisfies consumers' needs or wants, distinguishable from general categories or types of goods.