Tom Produces Commemorative T-Shirts in a Competitive Market

question 559

Multiple Choice

Tom produces commemorative t-shirts in a competitive market. If Tom decides to decrease his output, this will

• A)​increase his revenue, since the output decrease leads to a higher market price.
• B)​increase his revenue, since Tom's competitors will also decrease their output, so that price rises to offset the drop in Tom's output.
• C)​decrease his revenue, since his output has decreased and the price remains the same.
• D)​decrease his revenue, since the price does not rise sufficiently when output drops to offset the drop in Tom's output.

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Definitions:

Capitalism

An economic system in which trade, industries, and the means of production are largely or entirely privately owned and operated for profit.

Elite Control

The dominance or significant influence exerted by the elite or ruling class in directing the political, economic, or social affairs of a society.

Conflict Theory

A sociological perspective that views social life as a competition, emphasizing the role of coercion and power in producing social order.

Advertising Revenues

Income generated from the payment for advertisements displayed within media outlets, websites, or public spaces, crucial for supporting many business models.