This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: In a market characterized by a single seller and many buyers, will a seller's initiative to improve ... (Read 114 times)

oliviahorn72

  • Hero Member
  • *****
  • Posts: 579
on: Jun 30, 2018
In a market characterized by a single seller and many buyers, will a seller's initiative to improve the quality of its product at a higher cost of production be profitable?

Question 2

Product differentiation in monopolistically competitive markets ensures that ____ in equilibrium.
 a. marginal cost will exceed average revenue
 b. price will exceed marginal cost
 c. average variable cost will be declining
 d. marginal revenue will equal average total cost


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

snackralk

  • Sr. Member
  • ****
  • Posts: 363
Reply #1 on: Jun 30, 2018
Answer to Question 1

The success of the strategy will depend on the relationship between changes in the cost of production and changes in the buyer's valuation. If the increase in the cost of production is lower compared to the increase in the buyer's valuation, the strategy will be profitable. However, if the increase in the buyer's valuation of the improved good is lower than the increase in the cost of production then the strategy will prove to be unprofitable.

Answer to Question 2

b


oliviahorn72

  • Member
  • Posts: 579
Reply 2 on: Jun 30, 2018
Excellent

tandmlomax84

  • Member
  • Posts: 323
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

As the western states of America were settled, pioneers often had to drink rancid water from ponds and other sources. This often resulted in chronic diarrhea, causing many cases of dehydration and death that could have been avoided if clean water had been available.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

Despite claims by manufacturers, the supplement known as Ginkgo biloba was shown in a study of more than 3,000 participants to be ineffective in reducing development of dementia and Alzheimer’s disease in older people.

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

Increased intake of vitamin D has been shown to reduce fractures up to 25% in older people.

Disposable, single use thermometer strip Disposable, single use thermometer strip
A chest X-ray showing pneumonia characterized by the patch of gray-white areas. A chest X-ray showing pneumonia characterized by the patch of gray-white areas.
Single-Cell Model Single-Cell Model
The structure of a single developed neuron The structure of a single developed neuron
Markets and Institutions Market Story Problem Markets and Institutions Market Story Problem
Ancient fossilized single-celled organisms Ancient fossilized single-celled organisms
Video: Mechanisms for chromosome movement Animation

For a complete list of videos, visit our video library