In the short run, firms expand their production when the price level rises because
A) the money wage rate remains constant so the higher prices for their products makes it profitable for firms to expand production.
B) each firm must keep its production up to the level of its rivals, and some firms will expand production as the price level increases.
C) the higher prices allow the firm to hire more workers by offering higher wages, thereby increasing productivity and profits.
D) firms can increase their profits by increasing their maintenance.
A
You might also like to view...
Maximizing output by following the principle of comparative advantage requires
a. specialization only b. exchange only c. both specialization and exchange d. neither specialization nor exchange e. either specialization or exchange, but not both
The public debt as a percent of GDP is lower in the United States than in many other industrial nations.
Answer the following statement true (T) or false (F)