Which factors must a producer consider when deciding?
the elasticity of a good being supplied. competition within the market. the ability to produce the good efficiently. the ability to produce a good of low quality.
What is a measure of behaviors by producers and consumers in response to changes in price?
In economics, price elasticity is a measure of how reactive the marketplace is to a change in price for a given product. However, price elasticity works two ways. While price elasticity of demand is a reflection of consumer behavior as a result of price chance, price elasticity of supply measures producer behavior.
When a company produces goods for sale those goods must be?
When a company produces goods for sale, those goods must be A) created in ways that meet consumer demand.
What is the primary incentive of each producer to make widgets?
This are my answers: (a) The primary incentive would be the price. As the price increases, each of the producer wishes to make more widgets to sell because they can earn a higher revenue as the price of the widgets keep increasing. This is consistent with the Law of Supply.
What happens when the price of a good increases?
If the price of the good rises, the quantity demanded of that good decreases. If the price of the good falls, the quantity demanded of that good increases. the relationship between the quantity demanded and the price of a good when all other influences on buying plans remain the same.
Which best explains how the law of demand affects consumers quizlet?
Consumer demand changes often based on many factors. Which best explains how the law of demand affects consumers? It helps consumers tell producers when prices are too high. … More consumers want a product.
What does a elasticity mean?
What is high price elasticity?
An elastic demand or elastic supply is one in which the elasticity is greater than one, indicating a high responsiveness to changes in price. An inelastic demand or inelastic supply is one in which elasticity is less than one, indicating low responsiveness to price changes.
What happens as elasticity of supply rises?
According to basic economic theory, the supply of a good will increase when its price rises. Conversely, the supply of a good will decrease when its price decreases. … Elastic means the product is considered sensitive to price changes.
What happens to the amount of a good or service that is supplied to consumers?
supply goods to consumers. … The amount of a good or service can change. The law of supply states that as the price of a good rises, the quantity supplied of that good. increases.
What are the four factors of production?
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. The first factor of production is land, but this includes any natural resource used to produce goods and services.
How do people make economic decisions?
Economists use the term marginal change to describe a small incremental adjustment to an existing plan of action. … Rational people often make decisions by comparing marginal benefits and marginal costs. Thinking at the margin works for business decisions.