Other Things Being Equal, an Increase in the Price of a Good

question 6

Multiple Choice

Other things being equal, an increase in the price of a good leads to an increase in the amount produced. This is known as

• A) the law of demand.
• B) the law of supply.
• C) ceteris paribus.
• D) equilibrium.

---

Definitions:

MRP

Acronym for Marginal Revenue Product, which measures the addition to total revenue resulting from the sale of the output produced by one more unit of a variable input.

Haircuts

Often used as an example in economics, referring to a service that cannot be stored, saved, or inventoried, and must be consumed at the point of production.

MRP

Material Requirements Planning, a planning and inventory control system used to manage manufacturing processes.

Purely Competitive

A market structure characterized by many buyers and sellers, where each seller offers a homogeneous product and no single buyer or seller can influence the market price.