Figure 5.1. The figure shows a linear production possibility curve representing a tradeoff faced by a country, between necessities and luxuries.
-Which of the following is a possible cause of an increase in profit from the sale of goods and services?
A)A decrease in the per capita income of consumers
B)A decrease in the price of a substitute good or a service
C)An increase in the availability of raw materials
D)A decrease in the price of a good or service, everything else held constant
E)An increase in the price of a good or service, everything else held constant

Question

Figure 5.1. The figure shows a linear production possibility curve representing a tradeoff faced by a country, between necessities and luxuries​. 
-Which of the following is ​a possible cause of an increase in profit from the sale of goods and services?
A)​A decrease in the per capita income of consumers 
B)​A decrease in the price of a substitute good or a service 
C)​An increase in the availability of raw materials 
D)​A decrease in the price of a good or service, everything else held constant 
E)​An increase in the price of a good or service, everything else held constant

Quizplus · Accepted Answer

An increase in the price of a good or service, with everything else held constant, can lead to higher revenue per unit sold, potentially increasing profit if costs remain unchanged.

Figure 51 the Figure Shows a Linear Production Possibility Curve Representing