When Auctions,such as Those Used on EBay,are Used to Sell

question 9

Multiple Choice

When auctions,such as those used on eBay,are used to sell a product

• A)information about consumers' true reservation prices is minimized.
• B)information about consumers' true reservation prices is revealed.
• C)consumers have an incentive to bid higher than their true reservation prices.
• D)consumers do not have an incentive to bid their true reservation prices.

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Definitions:

Implicit Costs

refer to the opportunity costs that occur when a company uses internal resources that could have been used for another purpose but do not directly affect cash flow.

Entrepreneurial Talent

The specific skills, creativity, and innovation that individuals bring to starting and managing new ventures or businesses.

Forgone Interest

The potential interest earnings lost by choosing to invest capital in one option over an alternative that offers a higher return.

Short-Run Adjustment

The process by which businesses alter their production levels or inputs in response to short-term changes in market conditions.