If productivity increases,prices charged to consumers will tend to increase as well.

Question

Quizplus · Accepted Answer

Productivity increases lead to lower production costs, which allows businesses to offer lower prices to consumers. This is known as the "productivity effect". However, businesses may choose to increase prices for other reasons such as to maintain profit margins or to capitalize on increased demand due to higher productivity. Overall, the relationship between productivity and consumer prices is not a straightforward one.

If Productivity Increases,prices Charged to Consumers Will Tend to Increase