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

question 73

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.If Firm B produces a monitor that David buys,then the market outcome illustrates which of the following principles?
(i)
Free markets allocate the supply of goods to the buyers who value them most highly,as measured by their willingness to pay.
(ii)
Free markets allocate the demand for goods to the sellers who can produce them at the least cost.


Definitions:

Cross-Phase System

A system that operates or interacts across different phases or stages of a process or lifecycle.

Population's Statistical Distribution

A mathematical function that describes the likelihood of various outcomes in a population.

Population Size

The total number of individuals within a defined area or group for the purposes of study or measurement.

Population Behaviour

The collective actions, reactions, and interactions among individuals within a community or group.

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