In the Market for DVDs, 500,000 DVDs a Month Are

question 337

Multiple Choice

In the market for DVDs, 500,000 DVDs a month are available. The value people place on the 500,000th DVD a month is less than the marginal social cost of producing it. Resource use

• A) is efficient.
• B) is inefficient.
• C) would be more efficient if people firms would produce more DVDs.
• D) would be more efficient if people would buy more DVDs.

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Definitions:

Preexisting Duty Rule

In contract law, a principle that states if someone is already legally required to perform a certain duty, promising to perform that duty is not sufficient consideration for a new contract.

Consideration

The value (such as money, services, or goods) promised in a contract that motivates parties to enter into the agreement.

Ethical

Related to moral principles or the branch of knowledge dealing with these.

Liquidated Debt

A debt where the amount owed is known and determined, not subject to future conditions.