In this case, an increase in the general price level of goods and services by 10% implies that the inflation rate in the economy is 10% or 0.10. As the overall or general pice level of all the goods and services in the economy increases, the costs of factors or inputs of production and the intermediate goods would also increase signifying that the overall or total production and operational cost or expense of the firms or businesses would also increase they adversely impacting their overall profitability, holding everything else constant. Therefore, this can adversely impact the production level of goods and services or the aggregate supply of goods and services in the goods market and the economy thereby causing potential cost-push inflation in the goods market and the economy, again holding everything else constant. Now, in the short-run, the firms and businesses do not have enough time to alter their existing factors or inputs of production in response to any inflationary effects or a rise in the general price level of goods and services and the wages of the laborforce or workforce employed by the firms and businesses also remains constant or sticky and takes time to change in accordance with any inflationary changes in the economy.

Therefore, one of the reasons behind Bill's decision to keep its existing factor or input endowment or the physical equipment and capital inputs constant can be practically attributed to the time factor or issue. Furthermore, this also implies that the overall or total cost of production for Bill would remain unchanged or constant at least in the short-run as the company keeps it existing physical capital inputs or resources unchanged or fixed and the wages of its existing labor force or workforce unchanged or constant following an increase in the price level of goods and services. This decision of Bill can also be due to a conscious intention to avoid an increase in the price of the factors or inputs of production and the intermediate goods following an inflation or a rise in general price level of goods and services in th economy. Hence, to take economic or commercial advantage of the price increase of its intended products or output level, Bill can possibly reduce its final output level in the market to maintain its profit-maximizing output level in conjunction or in accordance with its existing total or overall cost of production, considering that the company does not change its existing factor or input endowment in the production or business operation. Therefore, as a compensatory decision to adjust its existing profit-maximizing output level, Bill can reduce or decrease its output level in the next year and this would essentially enable the company to keep its existing total or overall production and operational cost or expense as constant or unchanged.