Input Prices Affect the Firm's ________,And Output Prices Affect the Firm's

question 2

Multiple Choice

Input prices affect the firm's ________,and output prices affect the firm's ________.

• A) revenue; costs
• B) costs; costs
• C) costs; revenue
• D) revenue; revenue
• E) decisions in the short run but not in the long run; decisions in the long run but not in the short run

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Definitions:

Price Level

A measure of the average of all prices in an economy, indicating the cost of goods and services at a specific time.

Interest Rate

A percentage of a loan amount charged by the lender to the borrower for the use of money.

Money Supply

The grand total of all economic assets measured in currency available at a specific time in an economy, which covers coins, banknotes, and the balances in checking and savings accounts.

Money Supplied

The entire sum of assets in terms of money present within an economy at a given time.