A falling average cost implies that

Using marginal utility theory, when the price of a gallon of milk falls, a consumer will buy

A) the same amount of milk as before and buy more of all other goods. B) more milk. C) more milk only if its marginal utility is increasing. D) more milk only if its marginal utility is constant.

Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. Which of the following is true?

A) Both 10,000 and 30,000 are economically inefficient rates of output. B) If the price of iced tea is $3, consumers will purchase more than the economically efficient output. C) If the price of iced tea is $3, the output will be economically efficient but there will be a deadweight loss. D) If the price of iced tea is $3, producers will sell 30,000 units of iced tea but this output will be economically inefficient.