If the market for a product improves with increases in both the market demand and the price, then the reaction of companies in that market:
A) will be identical.
B) will depend on the ability of the firm's economists to accurately estimate the supply and demand curve.
C) will depend on whether or not the organization is attuned to market incentives.
D) is dependent on the government regulatory mission.

Question

Quizplus · Accepted Answer

The reaction of companies in a market that improves with increases in both market demand and price will depend on whether or not the organization is attuned to market incentives. Companies that are attuned to market incentives will react by increasing the supply of the product and raising prices to take advantage of the increased demand. However, companies that are not attuned to market incentives may not react in the same way, potentially losing out on the opportunity to increase profits. The other options (A, B, and D) do not accurately reflect the likely reaction of companies in this situation.

If the Market for a Product Improves with Increases in Both