Some Producers Are Chatting

question 63

Multiple Choice

Some producers are chatting.Which one of the following quotations refers to a rightward shift of the supply curve?

• A)"Competitors are leaving the industry."
• B)"Our new, sophisticated equipment will enable us to undercut our competitors."
• C)"Raw material prices have sky- rocketed; we will have to pass the cost on to our customers."
• D)"Wage increases have forced us to raise our prices."
• E)"We anticipate a big increase in demand.Our product price should rise, so we are planning for an increase in output."

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Definitions:

Pollutants

Substances or objects that cause pollution, negatively affecting air, water, or soil quality.

Marginal Benefit

The additional satisfaction or utility gained by consuming one more unit of a good or service.

Marginal Private Cost

The additional cost incurred by a producer or a consumer for producing or consuming one more unit of a good, excluding any external costs.

Marginal External Cost

The additional cost society bears due to one more unit of a good or service being produced, not included in the producer's cost.