Recall the Application about the price competition between satellite and cable TV services to answer the following question(s).Recall the Application. In most cases where satellite TV service is introduced in an area with cable TV service, if the price of cable TV decreases, then consumer surplus (in the cable TV market):
A. increases.
B. decreases.
C. drops to zero.
D. becomes negative.
Answer: A
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Refer to Figure 10.2. If in this economy the MPC = 0.6, Y2 = $50 billion, and AE2 is $5 billion below AE1, potential GDP is
A) $53 billion. B) $55 billion. C) $58.3 billion. D) $62.5 billion.
Revisions in the interest rate target
a. occur on a daily basis b. have widespread impacts on the financial markets c. require Congressional approval d. are based solely on data gathered in previous quarters e. are a no-lose opportunity for the Fed
If both borrowers and lenders anticipate the rate of inflation correctly, then
a. borrowers will lose real income. b. lenders will lose real income. c. both borrowers and lenders will lose real income. d. neither borrowers nor lenders will lose real income.
In the figure above, international trade ________ producer surplus in the United States by ________
A) decreases; $2.88 billion B) decreases; $1.92 billion C) increases; $4.8 billion D) increases; $3.6 billion