Which Statement Describes the Normal Pricing Pattern for a Network

question 217

Multiple Choice

Which statement describes the normal pricing pattern for a network good?

• A) Due to high fixed costs, the price starts high and then drops steadily as sales increase.
• B) Price starts low and then steadily rises as sales increase.
• C) Price starts low, rises, and then eventually falls as the market becomes saturated.
• D) There is a negative relationship between price and quantity demanded at all price levels.

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Definitions:

Intolerable Acts

Four parliamentary measures in reaction to the Boston Tea Party that forced payment for the tea, disallowed colonial trials of British soldiers, forced their quartering in private homes, and reduced the number of elected officials in Massachusetts.

Boston Tea Party

A political protest by the American colonists against British taxation, notably the Tea Act, taking place in 1773 in Boston, where they threw shipments of tea into the harbor.

Sons of Liberty

A secret organization formed in the American colonies to protect the rights of the colonists and to fight the abuses of taxation by the British government.

Stamp Act

A law passed by the British Parliament in 1765 requiring all legal and commercial documents in the American colonies to bear an official tax stamp, leading to widespread protests and contributing to the American Revolutionary movement.