What is the typical response of firms to an increase in the price of what they sell,for given input prices?
A)There is no change in the profit level of firms.
B)There is a decrease in employment in the industry.
C)There is an increase in hiring factors of production.
D)There is no change in output in the short run.

Question

Quizplus · Accepted Answer

When the price of what firms sell increases, they typically respond by increasing production to maximize profits, which often involves hiring more factors of production, assuming input prices remain constant.

What Is the Typical Response of Firms to an Increase