If the Price of the Good Measured on the Horizontal

question 55

Multiple Choice

If the price of the good measured on the horizontal axis is subject to volume discounts,then:

• A) the budget line will get steeper as the consumer moves along it from left to right.
• B) the budget line will get flatter as the consumer moves along it from left to right.
• C) the indifference curve will get steeper as the consumer moves along it from left to right.
• D) the indifference curve will get flatter as the consumer moves along it from left to right.

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Definitions:

Market Output

The total quantity of goods or services produced and offered for sale by firms in a particular market.

Fair Return

A reasonable profit level that a utility or service provider is allowed to earn, taking into account the need to provide goods or services at fair prices.

Economic Profit

The contrast between total financial gain and overall financial obligations, including both explicit and implicit expenditures.

Marginal Cost

The financial burden of producing a further unit of a product or service.