If the price of a substitute increases, which of the following is most likely to
ID: 1218064 • Letter: I
Question
If the price of a substitute increases, which of the following is most likely to happen in the market for the product under consideration in the short run?
___Supply will increase.
___Firms will leave the market.
Firms will devote more variable inputs in the production of this good.
Firms will devote less variable inputs in the production of this good.
___Supply will increase.
___Firms will leave the market.
___Firms will devote more variable inputs in the production of this good.
___Firms will devote less variable inputs in the production of this good.
Explanation / Answer
Firms will devote more variable inputs in the production of this good.