Author Question: A monopolistically competitive firm maximizes profit in the short run by producing where A) price ... (Read 143 times)

nevelica

  • Hero Member
  • *****
  • Posts: 563
A monopolistically competitive firm maximizes profit in the short run by producing where
 
  A) price is less than marginal revenue. B) price is greater than marginal cost.
  C) price is less than average revenue. D) price is less than marginal cost.

Question 2

You participate in a taste test for a new protein supplement called Kapow. You are given five consecutive one ounce vials of the supplement and after consuming each vial you are asked to note your reaction.
 
  You consume the first vial and your response is: Hmmm, quite good After the second, you say, Not bad at all. After the third, you note, It's alright. and after the fourth you wince, No more, the after-taste is getting to me. I need water. What economic principle does this scenario illustrate? Define the principle.


bookworm410

  • Sr. Member
  • ****
  • Posts: 341
Answer to Question 1

B

Answer to Question 2

It illustrates the law of diminishing marginal utility which states that consumers experience diminishing additional satisfaction as they consume more of a good or service during a given period of time.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The U.S. Pharmacopeia Medication Errors Reporting Program states that approximately 50% of all medication errors involve insulin.

Did you know?

Never take aspirin without food because it is likely to irritate your stomach. Never give aspirin to children under age 12. Overdoses of aspirin have the potential to cause deafness.

Did you know?

People with high total cholesterol have about two times the risk for heart disease as people with ideal levels.

Did you know?

Cutaneous mucormycosis is a rare fungal infection that has been fatal in at least 29% of cases, and in as many as 83% of cases, depending on the patient's health prior to infection. It has occurred often after natural disasters such as tornados, and early treatment is essential.

Did you know?

Certain rare plants containing cyanide include apricot pits and a type of potato called cassava. Fortunately, only chronic or massive ingestion of any of these plants can lead to serious poisoning.

For a complete list of videos, visit our video library