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How does a firm generally respond to a higher demand for its goods?
it rations goods
What is a firm's goal when determining how many goods to produce?
to produce enough goods to meet demand while making a profit
How does price elasticity of demand affect a firm's pricing decisions?
The price elasticity of demand affects a firm's pricing decisions by determining the optimal profit margin. Price elasticity of demand describes the rate of change of demand in response to a change in price. The higher it is, the higher demand changes in respond to price; lower means very little change. For a good with low elasticity, it is easier to profit off marking-up the price because demand falls little in response to a price increase. For a high elasticity, prices should approach equilibrium because straying from equilibrium results in a higher change in demand than in price.
How is a monopoly and a perfectly competitive firm similar?
A perfect competitive market and pure monopoly market both have to follow the "law of demand".
What does a firm do when the price of a good increases?
When the price of a good increases, a firm typically assesses the situation to determine if the higher price will lead to increased revenue. This may prompt the firm to increase production to capitalize on the opportunity for higher profits, assuming that demand remains strong. Additionally, the firm may also evaluate its cost structure and supply chain to ensure it can meet the new demand efficiently. In some cases, the firm might invest in marketing to promote the good further, leveraging the higher price point.
How does a firm generally respond to a higher demand for its goods?
it rations goods
What will a firm do when there is higher demand for its goods?
increase price bit higher than earlier and produce more so that demand equals the supply.
What is secondary demand?
It is the demand for specific goods/services of a firm. Due to differentiation of goods in the industry.
What is a firm's goal when determining how many goods to produce?
to produce enough goods to meet demand while making a profit
How does price elasticity of demand affect a firm's pricing decisions?
The price elasticity of demand affects a firm's pricing decisions by determining the optimal profit margin. Price elasticity of demand describes the rate of change of demand in response to a change in price. The higher it is, the higher demand changes in respond to price; lower means very little change. For a good with low elasticity, it is easier to profit off marking-up the price because demand falls little in response to a price increase. For a high elasticity, prices should approach equilibrium because straying from equilibrium results in a higher change in demand than in price.
How is a monopoly and a perfectly competitive firm similar?
A perfect competitive market and pure monopoly market both have to follow the "law of demand".
What happens when income tax are increased?
firm and households have less money to spend . this leads to a fall in demand for goods and services. Clover
What does a firm do when the price of a good increases?
When the price of a good increases, a firm typically assesses the situation to determine if the higher price will lead to increased revenue. This may prompt the firm to increase production to capitalize on the opportunity for higher profits, assuming that demand remains strong. Additionally, the firm may also evaluate its cost structure and supply chain to ensure it can meet the new demand efficiently. In some cases, the firm might invest in marketing to promote the good further, leveraging the higher price point.
When a firm makes a profit by producing enough goods to meet demand without having leftover supply at what point is it?
When a firm makes a profit by producing enough goods to meet demand without having leftover supply the point of profit is where marginal revenue equals marginal cost.
What happens when a firm raises its price in a market in which the price is in the inelastic range of the demand curve?
When a firm raises its price in a market where demand is inelastic, total revenue typically increases. This is because the percentage decrease in quantity demanded is smaller than the percentage increase in price, leading to higher overall sales revenue. Consumers are less sensitive to price changes for inelastic goods, often resulting in sustained or increased sales despite the higher price. Consequently, the firm benefits from increased revenue without significantly reducing the quantity sold.
What suggestion can you propose so that the collection of taxes by the BIR be increased?
firm and household have less money to spend this heads to a fall in demand for goods and services.
Distinguish between industry demand and firm demand?
Industry demand is subject to genera economic conditions. Firm demand is determined by economic conditions and competition
