Real GDP Will Increase

question 52

Multiple Choice

Real GDP will increase

• A)only when prices increase.
• B)only when output increases.
• C)when prices increase or output increases.
• D)All of the above are correct.

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Definitions:

Predatory Pricing

A competitive strategy where a company sets very low prices for its products or services with the intent to drive competitors out of the market.

Break-even Analysis

A calculation that determines when a business or project will be able to cover all its expenses and begin to make a profit.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain scale, such as rent, salaries, and insurance.

Variable Costs

are expenses that change in proportion to the activity of a business, such as sales volumes, including costs of goods sold and direct labor costs.