This graph illustrates the marginal costs and marginal benefits of acquiring information before making a major purchase.
Suppose this graph describes a town in which the only way to gather any information about the good is through Consumer Reports. If the subscription price of Consumer Reports increases, then the impact of this could be portrayed by the marginal:
A. cost curve shifting from MC0 to MC1.
B. benefit curve shifting from MB1 to MB0.
C. cost curve shifting from MC1 to MC0.
D. benefit curve shifting from MB0 to MB1.
Answer: C
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With price discrimination, a monopoly
A) converts consumer surplus into economic profit. B) converts producer surplus into economic profit. C) can charge a single price to all customers. D) produces less output than if it does not price discriminate. E) converts consumer surplus into deadweight loss.
When price decreases, consumer surplus
a. increases b. remains constant c. decreases d. becomes negative e. may increase or decrease
What do economists mean by "consumer equilibrium?"
According to the rule of 70,
a. if a country is growing at 14% per year, its output will double in approximately 5 years. b. if a country is growing at 10% per year, its output will double in approximately 7 years. c. if a country is growing at 2% per year, its output will double in approximately 35 years. d. all of the above are true.