If Price Rises, What Happens to Quantity Supplied for a Product

question 284

Multiple Choice

If price rises, what happens to quantity supplied for a product?

• A)It increases.
• B)It decreases.
• C)It does not change.
• D)Quantity supplied is constant, but supply increases.

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Definitions:

Monopolistically Competitive

Characterizes a market environment where various businesses market products that resemble each other but are not exact duplicates, thereby providing them with some level of control over the market.

Allocative Efficiency

A state of resource allocation in which goods and services are distributed according to consumer preferences, achieving optimal distribution.

Productive Efficiency

A scenario where goods or services are produced at the lowest possible cost and with maximum efficiency in resource usage.

Nonprice Competition

Strategies companies use to differentiate their product or service based on features, service, quality, or brand image rather than price.