Which of the Following Is FALSE

question 194

Multiple Choice

Which of the following is FALSE?

• A) A consumer is maximizing total utility when he or she gets the same amount of marginal utility from the last dollar spent on each good purchased.
• B) As additional units of a good or service are consumed, marginal utility diminishes.
• C) Utility is want-satisfying power.
• D) Assuming that the law of diminishing marginal utility holds, the demand curve must be upward sloping.

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Definitions:

Marginal Revenue

The extra revenue a company earns by selling an additional unit of a product or service.

Barrier to Entry

Factors that prevent or hinder companies from entering a particular market, which might include high startup costs, strict regulations, or strong competition.

Pricing Strategy

A plan or approach used by businesses to set the prices for their products or services based on various factors like market demand, competition, and cost of production.

Socially Optimal Price

The price of a product that results in the most efficient allocation of an economy’s resources and that is equal to the marginal cost of the product.