Which of the Following Is Not a Prediction of Marginal

question 116

Multiple Choice

Which of the following is not a prediction of marginal utility theory?

• A)Other things remaining the same, the higher the price of a good, the smaller the quantity demanded.
• B)Other things remaining the same, the lower the price of a good, the greater the quantity demanded.
• C)Other things remaining the same, the lower the price of a good, the smaller is the consumption of substitutes for that good.
• D)The law of demand.
• E)Diminishing marginal utility.

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Definitions:

Natural Monopoly

A market condition where a single firm can supply a good or service to an entire market at a lower cost than two or more firms.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity of output.

Market Output

The aggregate amount of products and services created and available for purchase within a market.

Merging of Firms

The process where two or more separate entities come together to form a single, combined organization, typically to achieve economic efficiencies or market advantages.