Once a Firm Has Determined the Quantity of Output It

question 9

Multiple Choice

Once a firm has determined the quantity of output it wishes to sell,the price it can charge is determined by:

• A)the cost of making the product.
• B)the demand curve that the firm faces.
• C)market demand for the product minus cost.
• D)the explicit cost of making the product plus the implicit costs incurred by the firm owner.

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Definitions:

Circular Flow

A model that depicts the continuous movement of money, goods and services, and factors of production between producers and consumers, within an economy.

Local Incomes

The amounts of money earned by individuals or households in a specific local area, which can reflect the economic conditions of that region.

Scarcity

The limited availability of resources to meet unlimited wants and needs.

Economic Principle

A widely accepted generalization that guides the analysis of economics, helping to predict how economic agents will behave under certain conditions.