Assume that the production technology required to produce goods X and Y is very similar.If a firm producing good X notices that the market price of good Y is rising,it will

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Since the production technology required to produce goods X and Y is very similar, the firm can easily shift into producing good Y to take advantage of the rising market price. This will allow the firm to make higher profits by producing and selling more of the higher-priced good. intensifying production of good X, anticipating a price increase for good X, leaving its production decisions unchanged, or charging a higher price for good X would not be the best strategies in this situation.

Assume That the Production Technology Required to Produce Goods X