If a Firm Expects That the Price of Its Product

question 70

Multiple Choice

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

• A)the firm has an incentive to increase supply now and decrease supply in the future.
• B)the firm has an incentive to decrease supply now and increase supply in the future.
• C)the firm has an incentive to increase quantity supplied now and decrease quantity supplied in the future.
• D)the firm will not change supply until it knows for certain what will happen to its price.

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Definitions:

PSAB

stands for Public Sector Accounting Board, which sets accounting standards for public sector entities in some countries, focusing on transparency and accountability.

Controlled Entities

Entities over which another entity has the power to govern financial and operating policies, typically through ownership of a majority voting interest.

Government Organization

An entity that is part of the government and is responsible for the administration and governance of a specific function or area.

Tangible Capital Assets

Physical, long-term assets held for business use and not expected to be converted to cash in the short term, such as buildings and machinery.