Related to the Economics in Practice on Page 267: When

question 367

Multiple Choice

Related to the Economics in Practice on page 267: When trying to determine the price to charge for a new product, firms sometimes charge one price in one market and another price in a second market. Firms call this approach

• A) price rationing.
• B) using a focus group.
• C) test marketing.
• D) benchmark pricing.

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Definitions:

Marginal Product

The additional output that is produced by adding one more unit of a specific input while holding all other inputs constant.

Market Wage

The prevailing wage rate paid for a specific job in the labor market, determined by the supply and demand for that type of labor.

Market Price

The going rate at which an asset or service can be acquired or disposed of in a certain market.

Marginal Product

The additional output gained by employing one more unit of a specific input, holding all other inputs constant.