Question

Other things the same, when the price level rises more than expected, some firms will have a. higher than desired prices, which increases their sales. b. higher than desired prices, which depresses their sales. c. lower than desired prices, which increases their sales. d. lower than desired prices, which depresses their sales.

Answer 1

Answer:

The correct option is C

Explanation:

Being other things to be constant, when the price rises more than the expected level, then the firms will be having a lower than the desired prices, which increases the sales because the firm has not expected or anticipated the higher prices which lead to the decision of keeping the prices low which could result or outcome in higher sales as the sales will shift from high price producers.