The welfare analysis of advertising is controversial because evaluation of the effect of advertising on aggregate surplus depends on:
A. the marginal cost of the advertising.
B. whether the inframarginal consumer is influenced by the advertising.
C. whether the advertising is tied to a quality increase.
D. the reason it succeeds in increasing demand.
D. the reason it succeeds in increasing demand.
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Looking ahead to how the shopkeeper is more likely to respond what price should the customer more likely to quote?
a. High price b. Low price c. Let the shopkeeper quote the price d. A compromised price between the high and the low
At any quantity at which the demand curve lies above the supply curve,
a. economic efficiency is achieved b. the cost of producing the last unit exceeds its value to some consumer c. marginal cost exceeds the market price d. the market is Pareto efficient e. the value of the last unit to some consumer exceeds the cost of producing it