Under which of the following situations would a seller prefer to incur the cost of improving the product quality?
a. If the increase in buyer's valuation for the improved product is higher than the cost of improving it.
b. If the increase in the seller's opportunity cost of improving the product is higher than the price of the product.
c. If the product improvement lowers the producer surplus.
d. If the product improvement allows the seller to a break even.
A
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Which of the statements best describes why the aggregate demand curve is downward sloping?
a. As the aggregate price level increases, consumer expectations about the future change. b. As the aggregate price level decreases, the stock of existing physical capital increases. c. An increase in the aggregate price level causes consumer and investment spending to fall, because consumer purchasing power decreases and money demand increases. e. As a good's price increases, holding all else constant, the good's quantity demanded decreases.
Suppose compensation is given by W = 500,000 + 200 ? + 17S, where W = total compensation of the CEO, ? = company profits (in millions) = $300, and S = sales (in millions) = $500. What percentage of the CEO's total earnings is tied to profits of the firm?
A. 1.5 percent B. 43.4 percent C. 7.9 percent D. 10.6 percent
Only when the unemployment rate is equal to the nonaccelerating inflation rate of unemployment (NAIRU) is the price level changing at a constant rate.
Answer the following statement true (T) or false (F)