Price and output decisions are two aspects of the same choice.

Question

Quizplus · Accepted Answer

Price and output decisions are interdependent and go hand in hand. The price of a product will affect the demand for it, which in turn will affect the optimal output level of the firm. Similarly, the output level will affect the cost of production, which will influence the price that the firm can charge. Therefore, price and output decisions are two sides of the same coin, and a firm must consider both in order to make optimal decisions.

Price and Output Decisions Are Two Aspects of the Same