26 Jul WHICH OF THE FOLLOWING CAN BEST EXPLAIN THIS OUTCOME?
A recent industry report concluded that the global demand for the good X is expected to increase. Ba Show more A recent industry report concluded that the global demand for the good X is expected to increase. Based on the demand projections given in the report Colaba a firm that produces and sells X is contemplating hiring more labor to increase production. Maria Williams and Christopher Lockhart both stock market analysts are discussing the prospects of the firm. Maria thinks that Colaba is a good stock to buy because she expects their profits to increase. Christophers opinion differs. He says that an increase in Colabas workforce will only increase the wage bill and reduce its profits. Colaba decided to increase the size of ots workforce by 5 % expecting profits to increase. However the firms profits dipped considerably in the next quarter. Which of the following can best explain this outcome? A. the government recently lowered import barriers on good X. B. Economic indicators suggest that the economy has completely recovered from a recession that hit them two years ago. C.most households in this country have a high propensity to spend and also have high levels of debt. D. good X is manufactured using a labor-intensive method of production. Show less
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