Examlex
Discuss why a dollar tomorrow cannot be worth less than a dollar the day after tomorrow.
If a dollar tomorrow were worth less than a dollar a day after tomorrow, it would be possible to earn a very large amount of money through a "money-machine" effect.This is only possible if someone else is losing a very large amount of money.These conditions can only exist for a short period and cannot exist in equilibrium as the source of money is quickly exhausted.Thus, a dollar tomorrow cannot be worth less than a dollar the day after tomorrow.
Profit-Maximizing
The process or strategy employed by businesses to determine the price and output level that delivers the maximum possible profit.
Externality
A side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved.
Efficient Level
The point at which resources are utilized in the most productive way, maximizing output or satisfaction without wasting any resources.
Price Charged
The amount of money demanded by a seller for a product or service.
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