Suppose That Firms a and B Each Produce High-Resolution Computer

question 157

Multiple Choice

Suppose that Firms A and B each produce high-resolution computer monitors, but Firm A can do so at a lower cost. Cassie and David each want to purchase a high-resolution computer monitor, but David is willing to pay more than Cassie. Which of the following market outcomes is efficient?

• A)Firm A produces a monitor that Cassie buys. David does not purchase a monitor.
• B)Firm A produces a monitor that David buys.
• C)Firm B produces a monitor that Cassie buys. David does not purchase a monitor.
• D)Firm B produces a monitor that David buys.

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Definitions:

Evaluations

The process of assessing or judging the value, performance, or significance of something or someone based on set criteria.

Affective States

Emotional conditions or feelings that can affect perceptions, judgments, and behaviors.

Arousal

A state of heightened physiological and psychological activity or awareness, often induced by stimuli or situations.

Guilt

A psychological state that arises from the realization of causing harm or failing to meet moral standards.