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alina1380 [7]
3 years ago
8

Why do rising prices for a good or service have the effect of causing firms to increase production?

Social Studies
1 answer:
Ludmilka [50]3 years ago
7 0

Answer:

As the price of good rises, existing firms will produce more to earn additional revenue, and supply will increase. If the price of a good falls, some firms will produce less, and others might drop out of the market, decreasing supply.

Explanation:

I hope this helped!

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