Figure 3-7 -Refer to Figure 3-7.Assume That the Graphs in This Figure

question 164

Multiple Choice

Figure 3-7
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for blu-ray discs.Which panel best describes what happens in this market if there is a substantial increase in the price of blu-ray players?

• A)Panel (a)
• B)Panel (b)
• C)Panel (c)
• D)Panel (d)

---

Definitions:

ATC

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

MC

Marginal Cost, the increase in total cost that arises from an extra unit of production.

MR

Marginal Revenue, the additional income generated from selling one more unit of a product or service.

Perfectly Elastic

Perfectly elastic refers to a situation where the quantity demanded or supplied responds infinitely to changes in price.