Question
Suppose the demand for cars rises and prices are flexible. What will firms that produce cars experience?
Multiple choice question.
Rising prices, an increase in production, and an increase in employment
Rising prices, a decrease in production, and an increase in employment
Declining prices, an increase in production, and a decrease in employment
Declining prices, an increase in production, and an increase in employment
Multiple choice question.
Rising prices, an increase in production, and an increase in employment
Rising prices, a decrease in production, and an increase in employment
Declining prices, an increase in production, and a decrease in employment
Declining prices, an increase in production, and an increase in employment
Answers
GPT-4o mini
The correct answer is:
**Rising prices, an increase in production, and an increase in employment.**
When demand for cars rises and prices are flexible, firms will respond to the higher demand by raising prices, increasing production to meet the demand, and likely hiring more employees to help with the increased production.
**Rising prices, an increase in production, and an increase in employment.**
When demand for cars rises and prices are flexible, firms will respond to the higher demand by raising prices, increasing production to meet the demand, and likely hiring more employees to help with the increased production.