Which of the Following Would Most Likely Not Cause Market

question 394

Multiple Choice

Which of the following would most likely not cause market demand for a normal good to decline?

• A) An increase in the price of a substitute.
• B) An increase in the price of a complement.
• C) A decline in consumer income.
• D) Consumer expectations that the good will go on sale in the near future.
• E) An announcement by the Surgeon General that the product contributes to premature death.

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Definitions:

Marginal Cost

The extra production cost for creating an additional unit of a good or service.

Average Total Cost

Represents the total cost of production (fixed plus variable costs) divided by the total quantity produced, indicating the cost per unit of output.

Subsidized

Financial support extended by the government or another body to reduce the cost of goods, services, or activities to encourage more consumption or participation.

Natural Monopolist

A single provider of a good or service in a market, where the nature of the product or service makes competition impractical due to high infrastructure or start-up costs.