Question

When rising material prices make it costly to produce regular cell phones, what is the likely market response?

a) Decrease in cell phone prices
b) Increase in cell phone prices
c) No change in cell phone prices
d) Introduction of new cell phone designs

Answer 1

The likely market response to rising material prices making it costly to produce regular cell phones is an increase in cell phone prices.

Step-by-step explanation:

When rising material prices make it costly to produce regular cell phones, the likely market response would be an increase in cell phone prices. As the cost of materials increases, it becomes more expensive for manufacturers to produce cell phones, which results in higher production costs. To compensate for these increased costs, manufacturers may raise the prices of cell phones to maintain profitability.