Tom produces commemorative t-shirts in a competitive market. If Tom decides to decrease his output, this will
a. increase his revenue, since the output decrease leads to a higher market price
b. increase his revenue, since Tom's competitors will also decrease their output, so that price rises to offset the drop in Tom's output.
c. decrease his revenue, since his output has decreased and the price remains the same.
d. decrease his revenue, since the price does not rise sufficiently when output drops to offset the drop in Tom's output.
c
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William Nordhaus' depletion hypothesis
A) is an attempt to explain the drop in the multifactor productivity growth rate between 1913 and 1964. B) suggests that depletion of natural resources may explain part of the drop in multifactor productivity growth. C) suggests that a drop in the rate at which new inventions are made may explain part of the drop in multifactor productivity. D) B and C E) all of the above
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward