If Producers Must Receive a Higher Price to Be Induced

question 285

Multiple Choice

If producers must receive a higher price to be induced to produce any quantity, we can conclude that

• A) supply decreased.
• B) demand decreased.
• C) both supply and demand increased.
• D) demand increased.

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Definitions:

Consumption

The action of using goods and services to fulfill needs or desires; usually the largest component of GDP.

Saving

The portion of income not spent on current expenditures or consumables, often put aside for future use or investments.

Opportunity Cost

The penalty of bypassing the alternative that ranks second in preference while making a choice.

Investment

The process of distributing funds with the aim of earning returns or profits.