In response to a decrease in the market demand, to maximize short- run profits, managers of perfectly competitive firms will_______production by employing ______inputs.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, when demand decreases, firms will reduce production to avoid producing surplus goods that cannot be sold. They achieve this by employing fewer variable inputs (like labor or raw materials), which can be adjusted more easily and quickly than fixed inputs (like machinery or land).

In Response to a Decrease in the Market Demand, to Maximize