1. If firms only know and care about their own production levels and are not aware about the economy's total output (Y) and AD, how do they know when to increase or decrease their production until Y = AD?

1. If firms only know and care about their own production levels and are not aware about the economy's total output (Y) and AD, how do they know when to increase or decrease their production until Y = AD?

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: An Introduction To Basic Macroeconomic Markets

Section: Chapter Questions

Problem 2CQ

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If firms only know and care about their own production levels and are not aware about the economy's
total output (Y) and AD, how do they know when to increase or decrease their production until Y = AD?

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