In the Short Run, the Most Important Consequence of an Increase

question 116

Multiple Choice

In the short run, the most important consequence of an increase in investment is a(n)

• A) increase in the capital stock.
• B) decrease in the capital stock.
• C) increase in aggregate demand.
• D) decrease in aggregate demand.

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Definitions:

Third-Degree Price Discrimination

Practice of dividing consumers into two or more groups.

Price Elasticities

Measures of how the quantity demanded or supplied of a good responds to a change in its price.

Marginal Revenue

The additional income gained from selling one more unit of a product or service.

Third-Degree Price Discrimination

A pricing strategy where a seller charges different prices to different consumer groups for the same product or service, based on varying demand elasticities.