With Nonrivalrous Consumption, Such as in the Case of Online

question 38

Multiple Choice

With nonrivalrous consumption, such as in the case of online music and movies, as more consumers buy the product,

• A) the average cost of the output declines because the marginal cost is very small.
• B) marginal cost is low, but the average cost of the output will be rising.
• C) the average cost of the output will be rising because marginal cost is quite high.
• D) marginal cost is quite high, but the average cost of the output will be declining.

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Definitions:

Price Increase

The act of raising the cost of goods or services, often in response to market demand, production costs, or inflation rates.

Statute Of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the parties to be enforceable.

UCC

Refers to the Uniform Commercial Code, which is a broad collection of regulations that oversee all commercial dealings within the United States.

CISG

The International Sale of Goods Convention by the United Nations, a global treaty that creates a standardized structure for international trade.