Which of the Following Ways Does Demand Influence Profit

question 52

Multiple Choice

Which of the following ways does demand influence profit?

• A)It predicts how many units will be sold.
• B)It directly influences the fixed cost of production.
• C)It helps in reducing the variable cost of production.
• D)It reduces the unit cost of production.

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Definitions:

Self-correcting Forces

Economic mechanisms that naturally work to restore equilibrium in markets without government intervention.

Potential GDP

The maximum output an economy can produce without triggering inflation, if it fully employs all available resources, including labor and capital.

Expansionary Gap

A situation where the actual level of output in an economy exceeds its potential output, often leading to inflation.

Active Approach

An active approach in policy-making or investment strategy entails ongoing, deliberate interventions or decisions to achieve specific economic or financial goals.