If Technology, A, Increases Permanently Then We Would Expect

question 3

Multiple Choice

If technology, A, increases permanently then we would expect:

• A)consumption to decrease as the substitution effect would be greater than the income effect of the change.
• B)consumption to increase as the income effect would be greater than the substitution effect of the change.
• C)consumption to increase as the substitution effect would be greater than the income effect of the change.
• D)consumption to decrease as the income effect would be greater than the substitution effect of the change.

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Definitions:

Market Power

The ability of a company or group of companies to manipulate prices or market conditions in their favor, often due to a lack of significant competition.

Oligopoly

A market structure dominated by a small number of large firms, leading to limited competition and potentially higher prices.

Monopoly

A market configuration where there is only one seller offering a distinctive product in the marketplace.

Antitrust Laws

Legislation passed to prevent monopolies or unfair business practices that limit competition and harm consumers.