Suppose that Techno TV produces LCD televisions.At a price of $2,000 per television, Techno determines that its optimal output is 3,000 television sets per week.If prices are sticky and fears of a recession reduce demand for LCD televisions, we would expect Techno to
A)reduce output in the long run.
B)reduce output in the short run.
C)raise prices in the short run to compensate for lost revenue.
D)lower prices in the short run to offset the reduced demand.

Question

Quizplus · Accepted Answer

In the short run, with sticky prices, Techno TV would likely reduce output rather than change prices to adjust to the decreased demand.

Suppose That Techno TV Produces LCD Televisions