The Main Reason That Many Businesses Fail When the Price

question 74

Multiple Choice

The main reason that many businesses fail when the price level is falling is that ________.

• A)deflation causes a decline in short-run aggregate supply
• B)as prices fall,businesses are unable to predict the quantity of output they will be able to sell
• C)the real value of the firms assets declines in proportion to the decrease in the price level
• D)falling prices mean that regular loan payments become increasingly difficult

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Definitions:

Ultimate Consumers

The end-users who purchase products or services for personal use rather than for resale or manufacturing.

Many Uses

A characteristic of products or services that can be utilized in multiple ways or for various purposes, enhancing their appeal.

Production

The process of creating goods and services through the combination of labor, materials, and technology.

Promotional Mix

The combination of marketing strategies and tactics used by a company to promote its products or services, including advertising, sales promotions, public relations, and direct marketing.