Refer to the above diagrams, one can conclude that if expectations are always fulfilled, Fancy Auto Company:
A)will never have to adjust the optimal output and employment levels accordingly.
B)has to adjust the employment level but not the optimal output.
C)has to adjust the optimal output level but not the employment.
D)has to adjust both optimal output level and employment accordingly.

Question

Refer to the above diagrams, one can conclude that if expectations are always fulfilled, Fancy Auto Company:
A)will never have to adjust the optimal output and employment levels accordingly. 
B)has to adjust the employment level but not the optimal output. 
C)has to adjust the optimal output level but not the employment. 
D)has to adjust both optimal output level and employment accordingly.

Quizplus · Accepted Answer

If expectations are always fulfilled, Fancy Auto Company will always produce at the optimal output and employment levels, meaning there will be no need to adjust these levels. Therefore, the answer is A - the company will never have to adjust the optimal output and employment levels accordingly.

Refer to the Above Diagrams, One Can Conclude That If