If an increase occurs in the demand for the output of industry A,we would expect all of the following to happen except:

Question

Quizplus · Accepted Answer

An increase in demand for the output of industry A would lead to an increase in profits, an increase in output, and an increase in demand for inputs used in the production of A. However, it would not lead to a decrease in prices of inputs used in the production of A, as an increase in demand would likely result in an increase in the prices of those inputs.

If an Increase Occurs in the Demand for the Output