Assume you are in the business of producing and selling cars. If you could produce more cars with the same input what would happen to your productivity and profits assuming the price of your cars remains the same?
A) Increase in productivity, decrease in profits
B) Increase in productivity, increase in profits
C) Decrease in productivity, decrease in profits
D) Decrease in productivity, increase in profits

Question

Quizplus · Accepted Answer

Producing more cars with the same input increases productivity because you're getting more output per unit of input. Assuming the price of cars remains the same and costs do not increase, selling more cars would also increase profits.

Assume You Are in the Business of Producing and Selling