If the Situation Modeled Is

question 12

Multiple Choice

If the situation modeled is

• A) increasing
• B) decreasing
• C) remaining constant
• D) More information is needed.
• E) Cannot be determined.

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Definitions:

Marginal Cost

Marginal cost is the change in total cost that arises when the quantity produced is incremented by one unit.

Product-variety Externality

The impact on consumers and producers resulting from an increase or decrease in the variety of products available in the market.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay.

Producer Surplus

The amount a seller is paid for a good minus the seller’s cost of providing it.