In the short run,increases in product prices increase firms' ________ per unit.
A) production costs
B) employment
C) sales
D) capacity
E) profit

Question

Quizplus · Accepted Answer

If the product prices increase, the revenue per unit sold will increase as well, provided that the demand stays constant. This means that the firm will earn more revenue per unit sold without incurring any additional costs, thus increasing their profit per unit. However, in the long run, the increase in prices may lead to changes in demand and production costs, which may impact the firm's overall profitability.

In the Short Run,increases in Product Prices Increase Firms' ________