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Refer to the Graphs

Question 218

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Refer to the graphs. Suppose a firm is currently producing 500 computers per week and charging a price of $1,000. How will the firm respond to a positive demand shock if prices are inflexible? A) The firm will increase production to 650 computers per week and charge a price of $1,000. B) The firm will continue to produce 500 computers per week and charge a price of $1,000. C) The firm will cut production to 300 computers per week and charge a price of $1,000. D) The firm will cut production to 300 computers per week and charge a price of $600. Refer to the graphs. Suppose a firm is currently producing 500 computers per week and charging a price of $1,000. How will the firm respond to a positive demand shock if prices are inflexible?


A) The firm will increase production to 650 computers per week and charge a price of $1,000.
B) The firm will continue to produce 500 computers per week and charge a price of $1,000.
C) The firm will cut production to 300 computers per week and charge a price of $1,000.
D) The firm will cut production to 300 computers per week and charge a price of $600.

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