If resource prices are fixed and the selling price rises, then
A)profits will decrease.
B)profits will increase.
C)profits will remain constant.
D)both profits and output will decrease.

Question

Quizplus · Accepted Answer

If the selling price of a good rises while the resource prices remain fixed, the profit margin for each unit sold will increase. Therefore, profits will increase as output remains the same.

If Resource Prices Are Fixed and the Selling Price Rises