Misty Has the Option of Purchasing One of Three Products

question 210

Multiple Choice

Misty has the option of purchasing one of three products: Brand A, Brand B, or Brand C. Each costs ten dollars. If she decides that Brand A meets her needs best, then the opportunity cost of this decision is

• A) Brand B plus Brand C.
• B) twenty dollars.
• C) Brand A.
• D) Brand B or Brand C, depending on which is considered the highest-value alternative forgone.

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Definitions:

MR = MC

The condition where marginal revenue equals marginal cost, often used as the profit maximization point for firms in microeconomics.

Economic Profits

The difference between total revenues and total costs, including both explicit and opportunity costs.

Profit-Maximizing Price

The price at which a company can make the highest profit, where marginal revenue equals marginal costs.

Monopoly Model

A market structure where a single firm controls the entire market supply of a product or service, facing no competition.