Multiple choice question.
A rise in prices, which will induce them to decrease production and reduce the number of workers
A fall in prices, which will induce them to decrease production and reduce the number of workers
A fall in prices, which will induce them to increase production and reduce the number of workers
A rise in prices, which will induce them to increase production and increase the number of workers
1 answer
The correct answer is:
A fall in prices, which will induce them to decrease production and reduce the number of workers
When demand for hot dogs decreases, the price of hot dogs will tend to fall due to the excess supply in the market. As prices decrease, firms will likely reduce their production levels and, as a consequence, may need to decrease their workforce as well.
