a) How do firms decide how much product to supply to the market? What equation governs their behavior?

b) Explain how

i) A cut in government expenditure

ii). Provide a separate explanation for each.

c) What will be the combined effect of these two changes on the government budget deficit? Use an equation to illustrate this.

Answer rating: 100% (QA)

a is the amount of a good that firms want to sell at a given price holding constant all other factor... View the full answer