There Is No Incentive for Additional Producers of an Information

question 163

Multiple Choice

There is no incentive for additional producers of an information product to enter the industry when the price charged for these products by each firm already in the industry is equal to

• A) marginal cost.
• B) average total cost.
• C) average fixed cost.
• D) average variable cost.

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Definitions:

Market Value

The present cost for purchasing or selling a product or service in a market.

Split-Off Point

The Split-Off Point is a stage in a production process where multiple products are generated from common inputs, each taking a different processing path thereafter.

Joint Costs

Costs incurred in the process of producing two or more products simultaneously, where the costs cannot be individually attributed to the products until a certain split-off point.

Market Value

The present cost at which a service or asset is available for purchase or sale.