A firm is operating with an optimal combination of inputs. Suddenly the price of one input rises. The firm should
a. buy less of that input and more of the other input.
b. change its input mix so that the marginal physical product of the input whose price has risen falls and the marginal physical product of the other input rises.
c. buy less of whichever input now has the highest money price and more of the other input.
d. reduce its output.
a
Economics
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If the price level increases, the AE curve shifts
A) upward and the AD curve shifts leftward. B) upward and there is a movement along the AD curve. C) upward and the AD curve shifts rightward. D) downward and there is a movement along the AD curve. E) downward and the AD curve shifts rightward.
Economics
What role do business firms play in output markets and in factor markets?
What will be an ideal response?
Economics