Substitutes
What will be an ideal response?
Goods that perform similar functions
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According to the above table, the equilibrium price of DVDs is
A) $16. B) $14. C) $12. D) $10.
Assume that an individual consumes only coffee and bagels and that the last cup of coffee yields 12 utils and the last bagel 6 utils. If the price of a cup of coffee is $1 and the price of the bagel is $.50, we can conclude that the:
A. consumer should consume more coffee and fewer bagels. B. price of coffee is too high relative to bagels. C. consumer should consume less coffee and more bagels. D. consumer is in equilibrium.
If someone invents a more cost effective way to produce frozen pizzas, then
A. The market supply curve for frozen pizzas will shift to the right. B. There will be a movement up along the market supply curve for frozen pizzas. C. There will be a movement down along the market supply curve for frozen pizzas. D. The market supply curve for frozen pizzas will shift to the left.
The existence of economies of scale is one reason oligopolies exist because
A. a firm is able to increase price leading to increased profits. B. the marginal cost decreases as output increases. C. as output increases average total cost decreases leading to large-scale firms. D. of strategic dependence.