If the Price of a Commodity Is Above Marginal Cost

question 35

Multiple Choice

If the price of a commodity is above marginal cost, then the economy will tend to

• A)overproduce the item.
• B)underproduce the item.
• C)produce the optimal amount of the item.
• D)overproduce and underproduce the item cyclically.

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Definitions:

Nominal Group Technique

A structured method for group brainstorming that encourages contributions from everyone in the group by having members write down their ideas and then collectively discussing and ranking them.

Delphi Technique

A method used to gather data and achieve consensus among experts through multiple rounds of questioning and feedback.

Rational Decision-Making Technique

A systematic approach to make decisions that are logical and based on available information, without letting emotions interfere.

Punctuated Equilibrium Model

A theory in evolutionary biology that posits that species experience long periods of stability interrupted by brief phases of significant change.