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To See How the Equilibrium Price Is Affected by the Increase

question 29

Multiple Choice

To see how the equilibrium price is affected by the increase in industry output that comes from the entry of new firms, take the derivative of _____ and see whether it is positive or negative.


Definitions:

Diminishing Marginal Utility

The principle that as an individual consumes more of a good, the utility (satisfaction or benefit) gained from each additional unit decreases.

Total Utility

The overall satisfaction or value a consumer receives from consuming a particular quantity of a good or service.

Marginal Utility

The extra pleasure or benefit obtained from consuming an extra unit of a product or service.

Total Utility

The complete gratification gained from the use of a certain quantity of goods or services.

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