Computer Chips Are a Normal Good

question 87

Multiple Choice

Computer chips are a normal good.Suppose the economy slips into a recession so that income falls.As a result,the demand for computer chips ________ so that the price of a computer chip ________.

• A)decreases;does not change
• B)increases;rises
• C)decreases;rises
• D)increases;falls
• E)decreases;falls

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for competition based on product differentiation.

Market Structure

Refers to the organizational characteristics of a market, including the number of firms, level of competition, and the distribution of market shares.

R&D

Stands for Research and Development, the innovative activities undertaken by corporations or governments in developing new services or products, or improving existing ones.

Monopolistic Competition

A market structure where many firms sell products that are similar but not identical, allowing for competition based on product differentiation.