If It Costs Danitra $225 to Create 4 Necklaces and $275

question 245

True/False

If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then $50 is the marginal cost of producing the 5th necklace.

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Definitions:

Short Run

A period in economic theory during which at least one input, such as plant size or the number of firms in the industry, is fixed and cannot be changed.

Perfect Competitor

A theoretical market structure in which many firms sell an identical product, and no single buyer or seller can influence the market price.

Perfectly Competitive Industry

A market structure where many firms sell identical products, entry and exit are easy, and no single buyer or seller can affect the market price.

Economic Profits

Profits exceeding the next best alternative use of resources, considered abnormally high in economic terms.