A Newspaper Typically Consumes a Smaller Fraction of a Consumer's

question 56

Multiple Choice

A newspaper typically consumes a smaller fraction of a consumer's budget than a home entertainment system.Therefore,you would expect the demand for:

• A)a home entertainment system to be more price-elastic.
• B)a home entertainment system to be more price-inelastic.
• C)newspapers to be more price-elastic.
• D)the two to be equally price-elastic.

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Definitions:

Imperfect Competitor

An entity in a market that cannot dictate the prices of its goods or services due to the presence of competition, contrary to a monopoly.

Regional

Pertaining to or characteristic of a specific geographic area or division, often considered in terms of economic, political, or cultural distinctions.

Local Levels

Pertains to activities, governance, or administration executed at a community, town, or city scale, focusing on the immediate geographical area.

Diseconomies of Scale

A situation in which a firm experiences an increase in average costs due to an increase in its size or output level, often resulting from inefficiencies and higher per unit costs.