Which of the Following Determines Whether a Firm Will Earn

question 58

Multiple Choice

Which of the following determines whether a firm will earn higher revenues when it raises its price?

• A)The cost of the firm's inputs.
• B)Government regulation of the industry.
• C)The price elasticity of demand.
• D)None of the above, because companies always earn higher revenues when they increase price.

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Definitions:

Bullwhip Effect

A phenomenon in supply chains where small changes in consumer demand cause larger and more amplified fluctuations in orders and inventory levels up the supply chain.

Profitability

A financial metric indicating the degree to which a company or project generates income or profit compared to its costs and investments.

Product Availability

The degree to which products are in stock and ready to be sold or delivered to customers, impacting customer satisfaction and sales.

Bullwhip Effect

A phenomenon where inaccuracies in demand forecasts cause fluctuations and inefficiencies in the supply chain.