If the Number of Firms Producing Mouthwash Increases and Consumer

question 27

True/False

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase.

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Definitions:

Inputs

Resources such as labor, materials, and capital used in the production process to create goods and services.

Output

The total amount of goods or services produced by a person, machine, company, or industry.

Diseconomies of Scale

Occur when a company or business grows so large that the costs per unit increase. It represents the negative counterpart to economies of scale.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operations, with cost per unit of output generally decreasing with increasing scale.