An economic analysis of "planned obsolescence" shows that
a. monopolies have an incentive to produce shorter-lived products, even when longer-lived products can be produced at the same cost.
b. firms prefer to produce shorter-lived products, because these result in greater sales and hence larger profits.
c. competitive firms are forced to produce the product with greatest longevity, but monopolies can successfully use planned obsolescence.
d. firms will make a longer-lived product if the additional cost is less than the present value of the benefits received by consumers.
b. firms prefer to produce shorter-lived products, because these result in greater sales and hence larger profits.
You might also like to view...
The Keynesians believe that
a. the Fed played a primary role in driving the Great Depression. b. the Fed played an important role in preventing the Great Depression from being worse than it could have been. c. the Fed played a negative but secondary role in the Great Depression. d. the Federal Reserve did all it could to prevent the Great Depression but essentially played no role in it.
Refer to the above figure. Suppose this industry was perfectly competitive and then merged into one monopolistic firm. The monopoly would
A) raise price from P1 to P2. B) reduce output from Q3 to Q1. C) reduce output from Q2 to Q1 and raise price from P3 to P4. D) raise price from P1 to P4.