Examlex

Solved

As the Price Level Rises Relative to Costs and the Real

question 25

Multiple Choice

As the price level rises relative to costs and the real wage rate falls, profits --------------------and the number of firms in business --------------------.


Definitions:

Marginal Product

The additional output produced as a result of adding one more unit of a specific input, keeping all other inputs constant.

Total Revenue

The overall income generated by a business from selling its goods or services before any costs are deducted.

Value of the Marginal Product

The additional revenue generated by employing one more unit of input, such as labor or capital.

Total Cost

The sum of all expenses incurred in the production of goods or services, including fixed and variable costs.

Related Questions