In the Short Run, Firms Expand Their Production When the Price

Multiple Choice

In the short run, firms expand their production when the price level rises because

A) firms can increase their profits by increasing their maintenance.
B) the money wage rate remains constant so the higher prices for their product makes it profitable for firms to expand production.
C) the higher prices allow the firm to hire more workers by offering higher wages, thereby increasing productivity and profits.
D) each firm must keep its production up to the level of its rivals, and some firms will expand production as the price level increases.