In Response to an Unexpected Change in Demand, If the Prices

question 2

Multiple Choice

In response to an unexpected change in demand, if the prices are free to adjust quickly:

• A)a firm could always operate at its optimal output level.
• B)a firm would experience a decline in its output and employment.
• C)a firm would not be able to adjust its output according to the plan.
• D)a firm would not be able to change its employment accordingly.

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Definitions:

Machine Hour

A measure of the amount of time a machine is operated, used in calculating manufacturing costs and efficiency.

Total Salaries

The aggregate amount of compensation paid to employees before deductions, such as taxes and retirement fund contributions, are made.

Quality Control Supervisors

Professionals responsible for overseeing the testing of products and materials to ensure they meet predetermined standards and specifications.

Work Shift

A period of time during which a group of workers performs their job duties at a company or workplace.