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How might a firm respond to a higher demand for its goods? A. limit its production B. raise prices C. cut prices D. increase advertising

Ronald Miller

in Business

1 answer

1 answer

Craig Stewart on August 21, 2018

The answer is option B. to increase the prices. When the growth of demand, while the firm is not able to increase production, to increase prices as there are buyers willing to pay more. That is the classic market equilibrium, supply and demand: increase demand, push up prices, the increase in supply pushes prices down.

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