"Supply creates its own demand" is known as
A. Say's law.
B. Murphy's law
C. Smith's law.
D. Keynes' Rule.
Answer: A
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Suppose Canon Inc decided to invest 45 billion yen in developing and launching a new model of its digital camera, expecting that it will bring additional sales of 60 billion yen
The company has already invested 38 billion yen when the marketing department suddenly finds out that the introduction of a similar camera by Sony will reduce Canon's expected additional sales to 30 billion yen. The company's management is trying to decide whether to continue investing in the new product or close the project. Canon hires you as an economic consultant. So, think like an economist to help the company's management make their decision: a) At this point in time, what is Canon's marginal cost of introducing the new product? b) What is Canon's marginal benefit from introducing the new product? c) Will you advise Canon to finish the project and introduce the new product? Why or why not? What principles of economic thinking will help you analyze the situation and make the right choice?
The producer surplus from a good is equal to the
A) maximum amount a consumer is willing to pay for the good minus the price that actually must be paid summed over the quantity sold. B) actual price of the good minus the maximum amount a consumer is willing to pay for the good. C) opportunity cost of producing the good minus its price summed over the quantity sold. D) price of the good minus its opportunity cost of production summed over the quantity sold.
You consume only steak and lobster. Your income effect from a drop in the price of lobster is measured by a movement along your indifference curve between steak and lobster
Indicate whether the statement is true or false
Refer to Figure 15-10. Compared to a perfectly competitive market, consumer surplus is lower in a monopoly by an amount equal to the
A) area FGE. B) area FHE. C) area P1P2EF. D) area P1P2GF.