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if the price of a good is low, question 3 options: a) firms can and should raise the price of the product. b) the supply curve for the good will shift to the left. c) firms would increase profit by increasing output. d) the quantity supplied of the good could be zero.
if the price of a good is low, question 3 options: a) firms can and should raise the price of the product. b) the supply curve for the good will shift to the left. c) firms would increase profit by increasing output. d) the quantity supplied of the good could be zero.
If the price of a good is low, firms can increase profit byincreasing output.Thus, the correct option in this regard is (c) firms would increase profit by increasing output.When the price of a good is low, it indicates that the demand for the product is not very high in comparison to the supply of the product. This means that more units of the good are being supplied than being demanded in the market. In such a situation, the firms have to decide whether to increase the price of the product or increase output. The former might not be a feasible option as the demand for the product is already low, and a price increase could furtherdecrease demand.Therefore, firms have to increase the output if they want to increase their profit.When firms increase their output, they can benefit from economies of scale. Economies of scale refer to the reduction in average production costs as a result of an increase in output. As the firms increase output, they can take advantage ofincreased efficiency,which leads to lower production costs. This, in turn, results in an increase in profit. Thus, if the price of a good is low, firms can increase profit by increasing output.So, option (c) is correct. The other options are not applicable in this situation:Option (a) - Firms cannot raise the price of the product when the demand for the product is low as it can further decrease the demand for the product, resulting inlower profitsfor the firms.Option (b) - The supply curve for the good will shift to the left when there is a decrease in supply, not when the price is low.Option (d) - When the price of a good is low, the quantity supplied of the good is not zero but, in fact, higher than the quantity demanded.Know more about theincreasing output.brainly.com/question/1787954#SPJ11...