Assume you are in the business of producing and selling frames. If you could produce more frames with the same input, what would happen to your productivity and profits assuming the price of your frames 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 frames with the same input increases productivity because you're getting more output per unit of input. Assuming the price of frames remains the same and costs do not increase, profits would also increase because you're selling more units without an increase in costs.

Assume You Are in the Business of Producing and Selling