When a Good Has Relatively Few Substitutes

question 57

Multiple Choice

When a good has relatively few substitutes:

• A) demand for the good is elastic.
• B) monopolists will tend to increase their markup for the good.
• C) monopolists will tend to decrease their markup for the good.
• D) producers will be able to "steal" all of the consumer surplus from consumers.

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Definitions:

Current Costs

The costs or expenses associated with the acquisition, production, or maintenance of assets and services at present market prices.

Freight Charges

Fees associated with the transportation of goods over distance, typically paid by the shipper or receiver.

Inventory Ownership

Refers to having legal title to goods and merchandise stored within a firm's warehouse or storage facility.

Weighted Average

It's a calculation that takes into account the varying degrees of importance of the numbers in a data set, often used in determining the cost of inventory.