In a market characterized by many buyers and one seller, investment in informative advertising by a seller can ____ the price of a commodity to customers and lower their _____ cost of acquiring information
a. decrease; sunk cost
b. increase; transaction cost
c. increase; sunk cost
d. decrease; transaction cost
B
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For each short-run average total cost curve, the ________ the plant, the ________ is the output at which average total cost is at a ________
A) larger; greater; maximum B) larger; greater; minimum C) larger; smaller; minimum D) smaller; smaller; minimum
If a market produces a level of output that exceeds the competitive equilibrium output, then
A) social welfare will be higher. B) producer surplus will be higher. C) marginal cost will exceed price. D) All of the above.
Market failures include all of the following EXCEPT
A) buyers pay for all the costs involved in the production of goods and services. B) public goods. C) positive externalities. D) negative externalities.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. only motorcycles being produced. B. overallocation of resources. C. an impossible production point. D. technological advancement.