Suppose that firms operate in a competitive market, attempt to maximize profits, and only use one factor
Question:
Which of the following propositions can be proven by the Weak Ax-iom of Profit Maximizing Behavior (WAPM)? Respond yes or no, and give a short argument.
(a) If the price of the input does not change, then a decrease in the price of the output will imply that the firm will produce the same amount or less output. ___________________
(b) If the price of the output remains constant, then a decrease in the input price will imply that the firm will use the same amount or more of the input. _______________
(c) If both the price of the output and the input increase and the firm produces less output, then the firm will use more of the input. ____________________
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