Firms Stop Producing DVDs and Start Producing Blu-Ray Discs Because

question 48

Multiple Choice

Firms stop producing DVDs and start producing Blu-ray discs because people prefer Blu-ray discs discs to DVDs. This will

• A) make the distribution of outcome more equitable.
• B) make the economy more stable.
• C) improve efficiency.
• D) make the economy less stable.

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Definitions:

Market Value

Market value is the price at which an asset would trade in a competitive auction setting, reflecting what a buyer is willing to pay.

Variable Manufacturing Costs

Variable manufacturing costs are expenses that fluctuate with production volume, such as raw materials and direct labor costs.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes to covering fixed costs and generating profit.

Production Capacity

The maximum amount of goods or services that a facility can produce over a given time period under normal operating conditions.