We Know with Certainty That a Consumer Will Buy a Newly

question 293

Multiple Choice

We know with certainty that a consumer will buy a newly introduced product rather than an existing product when the

• A)MU/ P of the new product exceeds the MU/ P of the existing product.
• B)price of the new product is less than the price of the existing product.
• C)MU of the new product is more than the MU of the existing product.
• D)law of diminishing marginal utility applies to the existing product.

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Dividends on Common Stock

Payments made to shareholders out of a company's earnings, specifically to the holders of its common stock.

Earnings Per Share

A measure of a company's profitability calculated by dividing net income by the number of outstanding shares.

Net Operating Income

Represents the amount of profit realized from a business's operations after subtracting all operating expenses from operating revenues.