If the Demand for Flat Screen Television Sets Is Rising

question 28

Multiple Choice

If the demand for flat screen television sets is rising while at the same time the price of a flat screen TV is falling, there is evidence of:

• A) economies of scale.
• B) diseconomies of scale.
• C) constant returns to scale.
• D) diminishing marginal product.

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Definitions:

Economy

A system of production, distribution, and consumption of goods and services among individuals and organizations in a society.

Taxable Income

The amount of income that is used to calculate how much tax an individual or a company owes to the government.

Progressive

Referring to policies or tax rates that increase proportionally with the ability to pay, targeting a higher burden on wealthier entities or individuals.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, often used to understand the sensitivity of demand in relation to price changes.