Suppose the Actual Price Level Exceeds the Expected Price Level

question 144

Multiple Choice

Suppose the actual price level exceeds the expected price level reflected in long-term contracts.How will firms respond?  

• A) Firms will find production more profitable than they had expected, and will increase the quantity of output supplied. 
• B) Firms will find production less profitable than they had expected, and will decrease the quantity of output supplied. 
• C) Firms will find production more profitable than they had expected, and will decrease the quantity of output supplied. 
• D) Firms will find production less profitable than they had expected, and will increase the quantity of output supplied.

---

Definitions:

Relative Measure

A metric that compares performance, values, or other quantifiable factors to a standard or to each other instead of using absolute numbers.

Sustainability Improvement

Refers to actions or initiatives taken to enhance the environmental, social, and economic aspects of operations in a way that promotes long-term viability and responsibility.

Indirect Emissions

Emissions resulting from the consumption of purchased electricity, heat, or steam – outside of the direct control of the facility generating them.

Direct Emissions

Emissions that are produced directly from a source, such as exhaust emissions from vehicles.