According to Misperceptions Theory,if a Firm Thought That Inflation Was

question 26

Multiple Choice

According to misperceptions theory,if a firm thought that inflation was going to be 5 percent and actual inflation was 4 percent,how may the firm be affected?

• A) It may believe that the relative price has increased,so it would increase production.
• B) It may believe that the relative price has increased,so it would decrease production.
• C) It may believe that the relative price has decreased,so it would increase production.
• D) It may believe that the relative price has decreased,so it would decrease production.

---

Definitions:

Large Packs

Product packaging that contains a significantly larger quantity of items, often resulting in a lower cost per unit for consumers.

Basics

Fundamental principles or essential facts concerning a subject.

Off-price Retailers

Retailers who provide high quality goods at lower prices by selling excess inventory or out-of-season items procured from wholesalers or manufacturers.

Stock Merchandise

Stock Merchandise refers to the inventory of goods that a retailer has on hand to sell to customers.