-The data in the above table indicate that when the price level is 120,
A) firms have unexpectedly low inventories, so prices will rise.
B) firms will plan to increase the level of output.
C) firms have unexpectedly high inventories, so prices fall.
D) inventories are at levels planned by firms.

Question

-The data in the above table indicate that when the price level is 120,
A) firms have unexpectedly low inventories, so prices will rise. 
B) firms will plan to increase the level of output. 
C) firms have unexpectedly high inventories, so prices fall. 
D) inventories are at levels planned by firms.

Quizplus · Accepted Answer

When the price level is 120, firms have unexpectedly high inventories, indicating that demand is lower than expected, leading to a decrease in prices to clear excess stock.

-The Data in the Above Table Indicate That When the Price