If the Price of Chicken Rises from $1

question 94

Multiple Choice

If the price of chicken rises from $1.25 per pound to $1.75 per pound, if the demand curve is consistent with the law of demand, then the quantity of chicken demanded would be predicted to go from

• A)100 pounds to 125 pounds per day.
• B)100 pounds to 75 pounds per day.
• C)100 pounds to 100 pounds per day, because the price of chicken does not affect the quantity demanded.
• D)100 pounds to 0 pounds per day, because consumers would stop purchasing chicken at a price above $1.25 per pound.

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Definitions:

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced, which decreases as production increases.

Producing Purses

The activity or business of manufacturing handbags.

Marginal Cost

The cost of producing one additional unit of a product or service, which can inform decisions on how much to produce.

Producing Purse

The process involved in creating and manufacturing handbags.