A Competitive Firm Produces a Single Output Using Several Inputs

question 1

Multiple Choice

A competitive firm produces a single output using several inputs.The price of output rises by $3 per unit.The price of one of the inputs increases by $6 and the quantity of this input that the firm uses increases by 12 units.The prices of all other inputs stay unchanged.From the weak axiom of profit maximization we can tell that

• A)the output of the good must have increased by at least 24 units.
• B)the inputs of the other factors must have stayed constant.
• C)the output of the good must have decreased by at least 12 units.
• D)the inputs of at least one of the other factors must have decreased by at least 12 units.
• E)the inputs of at least one of the other factors must have increased by at least 12 units.

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Definitions:

Introductory Stage

The initial phase in a product's lifecycle, where the focus is on marketing to build product awareness and develop a market for the product.

Growth Stage

The growth stage is a phase in the product life cycle characterized by rapid revenue and sales increases, along with more intense competition.

Maturity Stage

A phase in the product life cycle characterized by slow growth, increased competition, and a focus on retaining market share through differentiation and efficiency.

Excess Capacity

The situation in which a business can produce more goods or services than currently demanded, often leading to inefficiencies.