Due to a Decrease in the Birthrate, the Tiny Feet

question 343

Multiple Choice

Due to a decrease in the birthrate, the Tiny Feet Company expects a decrease in the sale of its baby booties over the next few years. The Tiny Feet Company will most likely

• A) keep current production constant, but plan to decrease production in the future.
• B) decrease current production.
• C) increase current production so that it can decrease production in the future.
• D) not change its current investment plans, but plan to decrease investment in the future.

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Definitions:

Units

Basic quantities or measures adopted to quantify and measure variables.

Marginal Revenue

The additional income earned by selling one more unit of a good or service.

Marginal Costs

The change in total production cost that arises when the quantity produced is incremented by one unit.

Investment

The allocation of resources, usually money, in order to gain profitable returns as interest, income, or appreciation in value.