If a Third Party Pays a Larger and Larger Share

question 20

Multiple Choice

If a third party pays a larger and larger share of the purchasing price of a good, economic theory indicates that

• A) the total expenditures (including those made by the third party) on the good will decline.
• B) the demand for the good will decrease.
• C) consumers will have a stronger incentive to economize on their use of the good.
• D) suppliers will have less incentive to provide the good at low prices.

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