Q 38

Suppose a company expects prices in general to rise by 5%,but the price of its product rises by 2%.How will the company respond to the price change? A) It will increase production since it's getting a higher price for the product. B) It will increase production more slowly since it's price is rising more slowly than average. C) It will reduce production since it perceives a relative decline in the demand for its product. D) It will stop production and shut down until prices rise more quickly.

Multiple Choice