Other Things Equal, If a Firm Finds the Demand for One

question 77

Multiple Choice

Other things equal, if a firm finds the demand for one of its products is inelastic, it can increase its total revenues by _____.

• A)raising its price
• B)lowering its price
• C)reducing fixed costs
• D)raising its variable costs

Recognize the effect of cost changes on market supply.

Identify the consequences of policy and regulation changes on markets.

Predict market outcomes based on simultaneous shifts in supply and demand.

Explain the invisible hand principle and its implications for market efficiency.

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Definitions:

Self-Sufficiency

The ability to fulfill all of one's needs without external assistance.

Merchandise Trade Balance

The difference between a country's exports and imports of tangible goods.

Services Trade Balance

The difference between exports and imports of services of a country, reflecting whether a country is a net provider or consumer of services internationally.

Adam Smith

An 18th-century economist known as the father of modern economics, famous for his theories on free markets and the 'invisible hand'.