If resource prices are fixed and the product selling price rises, then
A) profits will decrease.
B) profits will increase.
C) profits will remain constant.
D) both profits and output will decrease.

Question

Quizplus · Accepted Answer

If the product selling price rises while the resource prices remain fixed, the profit margin will increase. This is because the revenue generated from selling the product will exceed the cost of resources used to produce it, resulting in higher profits.

If Resource Prices Are Fixed and the Product Selling Price