In the short run, the primary determinant of output of firms is the:
A) level of demand.
B) future price.
C) availability of inputs.
D) level of prices.

Question

Quizplus · Accepted Answer

In the short run, firms adjust their output based on the level of demand for their goods or services. The higher the level of demand, the more output they will produce to meet it. Therefore, the primary determinant of output in the short run is the level of demand. Choices B, C, and D may also have an impact on output, but not to the same extent as demand in the short run.

In the Short Run, the Primary Determinant of Output of Firms