Patti buys a new kind of cereal to try even though it's more expensive than her favorite kind. After a single bowl, Patti decides she does not care for the new cereal at all, and she:
A. forces herself to finish it, because she irrationally focuses on the sunk cost of the cereal.
B. throws it away, because she irrationally spent money on something she had no information about.
C. forces herself to finish it, because she rationally computes the cost per bowl.
D. None of these is likely to happen for the reason stated.
A. forces herself to finish it, because she irrationally focuses on the sunk cost of the cereal.
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The above figure shows the market for a particular good. If the market is controlled by a perfect-price-discriminating monopoly, compared to a perfectly competitive market, the change in consumer surplus is
A) A. B) A + B + C. C) A + B + C + D + E. D) zero.
A perfectly competitive firm acts as a ___________, so it calculates total revenue by multiplying the given market price by the quantity of output the firm chooses.
a. natural monopoly b. price taker c. technological monopoly d. drag on the market