The concept of "demand- determined output" requires _ to remain constant as output increases.
A)government purchases
B)technology of production
C)firms' unit costs
D)the ratio of price setters to price takers
E)labour productivity

Question

Quizplus · Accepted Answer

In a demand-determined output scenario, the level of output is determined by the level of demand in the market. To maximize profits, firms will want to produce at the lowest possible unit cost. Therefore, as output increases, firms will need to keep their unit costs constant in order to maintain profitability. This is why it is necessary for unit costs to remain constant as output increases in a demand-determined output scenario.

The Concept of "Demand- Determined Output" Requires _ to Remain