In the short run,in response to an increase in demand,producers will typically choose _______ prices,but rather to meet the increased demand at _______ prices.

Question

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In the short run, producers may not have enough time to increase their production capacity in response to an increase in demand. Therefore, they may choose not to raise their prices but rather meet the increased demand at preset prices, which could lead to a temporary shortage. This is usually the case when the market is already at full capacity and cannot produce more goods or services immediately. Choosing to cut prices in response to an increase in demand is not typical as it may reduce the perceived value of the product or service. Similarly, increasing variable costs may reduce profit margins, making it unlikely that producers will choose to cut prices or raise variable costs in response to an increase in demand.

In the Short Run,in Response to an Increase in Demand,producers