Shelly's Company Produces Computers, Phones, and Tablets

question 13

Multiple Choice

Shelly's company produces computers, phones, and tablets. About six months ago, Shelly began to keep track of number of hours worked at the company, and the resulting output. When she compared the results, she found that the number of workers (and the hours they worked) remained relatively steady over the past six months; however, the work site's output improved considerably. This indicates that

• A) productivity at the work site has increased.
• B) the work site sold off some of its excess inventory.
• C) the company's prices have increased faster than the wages paid to workers.
• D) the company should hire more workers.

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Definitions:

Barriers to Entry

Economic, procedural, regulatory, or technological factors that obstruct or limit the possibility of new competitors entering an industry.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, allowing firms to make adjustments and the market to stabilize at a point where supply equals demand.

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and products that are close substitutes, leading to price competition.

Market Price

Market price is the price at which a good or service is bought and sold in the marketplace, determined by the forces of supply and demand.