Which of the following is used to explain why a consumer's willingness to buy a cell phone increases as the number of other people who own and use cell phones increases?
A) network externalities B) diminishing marginal utility
C) market failure D) the income effect of a price change
Question 2
Assuming zero transactions costs, if your local grocer buys oranges at a low price from an orchard and resells them to you at a higher price, then the grocer's revenue minus costs is known as
A) transactions profits. B) pure profits.
C) excess profits. D) arbitrage profits.
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