Based on this consumer surplus graph, what would Emily decide about buying a third glass of tea?
a. She will buy it because the consumer surplus is much higher than for earlier glasses.
b. She won’t buy it because her willingness to pay is less than the market price.
c. She will buy it because the market price is lower than her willingness to pay.
d. She won’t buy it because the market price is above the price ceiling established for tea.
b. She won’t buy it because her willingness to pay is less than the market price.
You might also like to view...
Hotspur Incorporated, a manufacturer of microwaves, is a price taker in both the input and output markets. To maximize its profit, Hotspur will hire labor up to the point where
A) the marginal revenue product of labor equals the wage rate. B) the marginal revenue product of labor equals the output price. C) the marginal product of labor is no longer positive. D) all economies of scale have been exhausted.
If countries have similar factors of production and similar productivities, most of their trade is likely to be intraindustry
Indicate whether the statement is true or false
In an industry where some firms were unionized and others were not, the union would oppose which of the following a. A decrease in the price of a complementary input
b. An increase in the price of a substitute input. c. An increase in demand for the goods produced by the industry. d. A shift in industry production overseas, where the union has no power.
The long-term trend in the United States is for markets to become more oligopolistic over time
Indicate whether the statement is true or false