Suppose That a Firm Successfully Introduces a Highly Profitable New

question 5

Multiple Choice

Suppose that a firm successfully introduces a highly profitable new product. If this new product is priced higher than existing substitute products, then the

• A) new product has greater marginal utility than the existing products.
• B) laws of economics have been violated.
• C) new product must have increasing, not diminishing, marginal utility.
• D) existing products were unprofitable to produce.