The Following Question Are Based on the Following Information

question 11

Multiple Choice

The following question are based on the following information. Five adolescents are willing to buy the latest iPhone game at these prices:

-A $1 price increase would reduce the quantity demanded in this market by

• A) zero.
• B) one.
• C) two.
• D) three.
• E) four.

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Definitions:

Positive Economic Profit

The excess amount by which total revenue surpasses the total costs, including opportunity costs of production.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information.

ATC

Average Total Cost, which is the total cost per unit of output produced, calculated by dividing the total cost by the quantity of output.

Marginal Cost

Marginal cost refers to the additional total cost incurred from the production of an extra unit of a good or service.