Refer to the Graphs Above

question 37

Multiple Choice

Refer to the graphs above. Suppose a firm is currently producing 500 computers per week and charging a price of $1000. How will the firm respond to a positive demand shock if prices are inflexible?

• A) The firm will increase production to 650 computers per week and charge a price of $1000
• B) The firm will continue to produce 500 computers per week and charge a price of $1000
• C) The firm will cut production to 300 computers per week and charge a price of $1000
• D) The firm will cut production to 300 computers per week and charge a price of $600

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Definitions:

Recency Effect

A memory bias that favors the recall of the most recently presented information over older information.

Complex Information

Information that is detailed, intricate, and challenging to understand or process.

Visible Demographic Group

A segment of the population that can be easily identified or recognized based on visible characteristics, such as race, gender, or age.

Johari Window

A model that helps people understand their relationship with themselves and others, involving four quadrants representing known, hidden, blind, and unknown aspects of one's self.