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Economics
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The price effect refers to how:

a. Lower output affects the price.

b. Lower prices affect the quantity sold.

c. Lower prices affect revenue.

d. Firms choose their quantity.

e. Firms can set their prices.

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Joshua Stredder
Joshua StredderLv10
6 Nov 2020

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Related questions

A lower price increases the quantity demanded because
Ā 
A. Supply curves are upward sloping.
B. The lower price will decrease real income.
C. The lower price induces consumers to use this product instead of similar product.
D. Firms produce more at lower prices.

Other things remaining equal, the law of demand says that higher prices will lead to:

A) larger quantity demanded and lower prices to a larger quantity demanded

B) smaller quantity demandedĀ and lower prices to a smaller quantity demanded

C)larger quantity demandedĀ and lower prices to a smaller quantity demanded

D)smaller quantity demanded and lower prices to a larger quantity demanded

In a perfectly competitive market, the firm is a price taker because _____.
Ā 
A.

the price is dictated by the largest firm in theĀ market, and if a given firm lowers its price other firms will conspire against it

B.

the firms in perfect competition are interdependent and if one firm charges a lowerĀ price, other firms will also lower their prices and all firms will incur an economic loss

C.

the price in the market is the price that maximizes eachĀ firm's producer surplus

D.

each firm makes a slightly different product

E.

it produces only a tiny proportion of the total output of a particular good and buyers are well informed about the prices of other firms

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