Suppose That Firms a and B Each Produce High-Resolution Computer

question 73

Multiple Choice

Suppose that Firms A and B each produce high-resolution computer monitors,but Firm A can do so at a lower cost.Cassie and David each want to purchase a high-resolution computer monitor,but David is willing to pay more than Cassie.If Firm B produces a monitor that David buys,then the market outcome illustrates which of the following principles?
(i)
Free markets allocate the supply of goods to the buyers who value them most highly,as measured by their willingness to pay.
(ii)
Free markets allocate the demand for goods to the sellers who can produce them at the least cost.

• A)(i)only
• B)(ii)only
• C)both (i)and (ii)
• D)neither (i)nor (ii)

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Definitions:

Verbal

Relating to or in the form of words, especially spoken communication.

Self-Promotion

The act of highlighting one's own skills, achievements, or qualities often for the purpose of advancing one's career or standing within a group.

Channels

Pathways or mediums through which information, goods, or services are distributed from producers to consumers.

Intercultural Communication

The process of exchanging meaningful and unambiguous information across cultural boundaries, to understand and appreciate cultural differences.