Consider a BMW automobile plant. If the price of BMWs increase by 10 percent and the money wage rate and other costs ____________ , there will be____________ .
A) do not change; no change in production
B) increase by 10 percent; an increase in BMWs profits
C) increase by 10 percent; an increase in BMWs production
D) do not change; an increase in BMWʹs production and profit

Question

Consider a BMW automobile plant. If the price of BMWs increase by 10 percent and the money wage rate and other costs ____________ , there will be____________  .
A) do not change; no change in production
B) increase by 10 percent; an increase in BMWs profits
C) increase by 10 percent; an increase in BMWs production
D) do not change; an increase in BMWʹs production and profit

Quizplus · Accepted Answer

If the price of BMWs increases by 10 percent while the money wage rate and other costs do not change, the profit margin per car increases, incentivizing the plant to increase production to maximize profits.

Consider a BMW Automobile Plant