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While Still Marketing Traditional Antacids,pharmaceutical Firms Have Introduced New Over-The-Counter

question 88

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While still marketing traditional antacids,pharmaceutical firms have introduced new over-the-counter antacids that block the production of stomach acids.(Traditional antacids treat heartburn by neutralizing stomach acid. ) If sales of the new acid blockers reduce sales of the traditional antacids,what has occurred?


Definitions:

Marginal Cost Curve

A graph that shows the change in the total cost of producing one additional unit of a product or service.

Average Total Cost

the total cost of production divided by the number of units produced, reflecting the average cost per unit of output.

Average Variable Cost

The total variable costs of production divided by the number of units produced, indicating the variable cost per unit.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

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