According to the idea of consumer sovereignty, what will happen in the market for widgets if consumers decide they no longer desire widgets?
What will be an ideal response?
If consumers no longer desire widgets, they will send a message to producers by not purchasing widgets. Since firms will be unable to make a profit selling widgets, widget-producing firms will go out of business (or switch to producing something else) and widgets will no longer be produced. Thus, the consumers' preferences dictate what is produced.
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In a short-run production process, the marginal cost is rising and the average total cost is falling as output is increased. Thus, marginal cost is
A) below average total cost. B) above average total cost. C) between the average variable and average total cost curves. D) below average fixed cost.
Refer to the below schedules. Suppose that the supply of a resource is given by the schedule that exhibits a zero price elasticity. If demand for the resource increases from the original demand schedule by 20 units at each price, then the equilibrium economic rent would be:
Use the following demand schedule and possible supply schedules, A-D, to answer the question.
A. $4
B. $3
C. $2
D. $1