As a Result of an Increase in a Product's Price

question 37

Multiple Choice

As a result of an increase in a product's price:

• A)​product supply increases.
• B)​product supply decreases.
• C)​product supply does not change, but quantity supplied increases.
• D)​the impact on product supply is uncertain.Economic theory has no answer to this question.

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Definitions:

Short Run

A period in economics during which the quantities of some inputs cannot be changed, limiting the capacity to adjust production levels.

Step-Variable Cost

Refers to a cost that remains fixed for a certain level of production or activity, but can increase in a step manner when a certain threshold is exceeded.

Activity

The actions undertaken by an individual or organization, often relating to business operations or project management.

Variable Cost Per Unit

The cost that changes in proportion with the production volume or activity level.