The Weak Axiom of Revealed Preference (WARP) States That, If

question 39

True/False

The Weak Axiom of Revealed Preference (WARP) states that, if bundle x is ever directly revealed to be preferred to bundle y when the two bundles are not identical, then y can never be directly revealed to be preferred to x.

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Definitions:

Constant Marginal Cost

A situation where the cost of producing an additional unit of output is the same, regardless of the volume produced.

Inverse Demand

A mathematical function that expresses the price of a good or service as a function of the quantity demanded, showing how price changes with demand.

Cournot Duopolists

Firms in a Cournot duopoly compete by choosing quantities rather than prices, assuming the quantity set by the competitor as given while deciding their own.

Total Cost

The total expenses associated with manufacturing goods or services, encompassing both constant and fluctuating costs.