One Reason for the Decline in Output with the Seventh

question 53

Multiple Choice

One reason for the decline in output with the seventh machine in Exhibit 13­2 could be that

• A)the increase in the company's power consumption when seven machines are being used causes its electricity bills to be much Higher
• B)the increase in the company's power consumption when seven machines are being used causes fuses to blow more often
• C)no one uses the seventh machine; only six are necessary
• D)no one uses the seventh machine; only five are necessary
• E)workers no longer have to wait in line to make copies because more machines are available

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Definitions:

Herfindahl Index

An economic indicator used to measure the size of companies in relation to the industry and the level of competition among them.

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market, including high start-up costs, strict regulations, and established brand loyalty.

Differentiated Products

Differentiated products are goods or services that differ from other products in the market in terms of quality, features, branding, or other attributes that are valued by consumers.