The idea that consumers rule the market
a. capitalism
b. consumer sovereignty
c. private property rights
d. "the customer is never right"
Answer: b. consumer sovereignty
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A natural monopoly that charges the profit-maximizing price will produce ________ amount of output than a ________
A) a larger; natural monopoly regulated with an average cost pricing rule B) a more efficient; perfectly competitive industry C) the same; natural monopoly regulated with a marginal cost pricing rule D) a smaller; natural monopoly regulated with a marginal cost pricing rule
The average fixed cost curve increases as output increases.
Answer the following statement true (T) or false (F)
A good is inferior for a consumer if
A) it is never included in his or her consumption bundle. B) its consumption rises when income rises. C) its consumption falls when income rises. D) some minimal level of the good must be consumed to assure the consumer's survival.
If a price ceiling is set above the equilibrium price,
A. there will be a shortage. B. quantity demanded will equal quantity supplied. C. there will be a surplus. D. demand will be less than supply.