Asked by Keely Messer on Jun 23, 2024
Verified
When a profit-maximizing firm in a competitive market experiences rising prices, it will respond with an increase in production.
Rising Prices
A situation where the general level of prices for goods and services in an economy increases over a period of time.
- Determine the impact of market prices on the production decisions of companies in competitive markets.
Verified Answer
KF
Keith FerranteJun 23, 2024
Final Answer :
True
Explanation :
In a competitive market, when prices rise, the profit margins on goods sold increase, incentivizing firms to produce more to take advantage of the higher prices and increase their profits.
Learning Objectives
- Determine the impact of market prices on the production decisions of companies in competitive markets.
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