Other Things Constant, How Will a Decrease in the Wages

question 24

Multiple Choice

Other things constant, how will a decrease in the wages of teenagers affect the market for fast food hamburgers?

• A) The supply of fast food hamburgers will increase, leading to an increase in the price of hamburgers.
• B) The supply of fast food hamburgers will increase, leading to a reduction in the price of hamburgers.
• C) The supply of fast food hamburgers will decrease, leading to an increase in the price of hamburgers.
• D) The supply of fast food hamburgers will decrease, leading to a reduction in the price of hamburgers.

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Definitions:

ATC Curve

Average Total Cost Curve, a graphic representation that shows the cost per unit of output produced.

Barriers to Entry

Factors that make it difficult for new firms to enter a market, such as high startup costs, stringent regulations, or strong competition from existing firms.

Administered Prices

Prices that are set by the company rather than determined by market demand and supply conditions; often found in less competitive markets.

Cartel

An association of independent businesses or countries agreeing to coordinate their production and pricing to monopolize a market or maximize profits.