Refer to the graphs above. Suppose a firm is currently producing 500 computers per week and charging a price of $1000. How will the firm respond to a positive demand shock if prices are inflexible?
A) The firm will increase production to 650 computers per week and charge a price of $1000
B) The firm will continue to produce 500 computers per week and charge a price of $1000
C) The firm will cut production to 300 computers per week and charge a price of $1000
D) The firm will cut production to 300 computers per week and charge a price of $600
Correct Answer:
Verified
Q69: Business cycle fluctuations typically arise because:
A) The
Q70: Q71: Because prices are sticky, positive demand shock Q72: If prices of goods and services quickly Q73: If prices of goods and services are
