If the Cost of Doing Business Decreases, the Result Is

question 123

Multiple Choice

If the cost of doing business decreases, the result is _____ equilibrium price and _____ equilibrium quantity.

• A) lower; lower
• B) lower; higher
• C) higher; lower
• D) higher; higher

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Definitions:

Worker

An individual who performs labour for a company or another person in exchange for compensation.

Diminishing Returns

A rule that implies that after reaching a certain threshold, the profit rate from investing more into a specific sector won't keep rising unless there are changes in other contributing factors.

Production Function

An equation that describes the maximum output that can be achieved with a given set of inputs.

Labor

The use of human mental and physical efforts in the process of producing goods and offering services.