If a Firm Expects That the Price of Its Product

question 57

Multiple Choice

If a firm expects that the price of its product will be higher in the future than it is today

• A) the firm will go out of business.
• B) the firm has an incentive to increase supply now and decrease supply in the future.
• C) the firm has an incentive to decrease quantity supplied now and increase quantity supplied in the future.
• D) the firm has an incentive to decrease supply now and increase supply in the future.

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Definitions:

Union Members

Individuals who belong to a labor union, an organization that represents workers' interests in negotiations with employers.

Exclusive Union

A labor union arrangement where only members of the union can be employed by the firm or within a certain industry.

Market Imperfections

Any departure from the ideal conditions of perfect competition that prevents the efficient allocation of resources.

Higher-Paying Jobs

Employment positions that offer wages above the average for a particular industry or region.