Which of the Following Is an Example of a Macroeconomic

question 63

Multiple Choice

Which of the following is an example of a macroeconomic factor that affects a firm's profits?

• A) The economy is hit by a recession.
• B) A new firm enters the market and the market price falls.
• C) The firm acquires a key input supplier.
• D) The firm undertakes a massive advertising campaign to increase sales.

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Definitions:

Substitute Products

Goods or services that can be used in place of each other, demonstrating a positive cross-elasticity of demand.

Oligopolistic Firms

Companies that are part of an oligopoly, a market structure with a small number of large firms dominating the industry, often leading to strategic behavior.

High Profits

Increased financial gains resulting from operating activities, typically seen as significantly above the average or expected level.

Market Structure Types

Various classifications of market systems based on the number of firms in the market, the nature of the product, and the degree of competition, including perfect competition, monopoly, oligopoly, and monopolistic competition.