Use the Following to Answer Question(s): Chip Production

question 141

Multiple Choice

Use the following to answer question(s) : Chip Production
Assume that Sandy Chip Products, Inc., is the world's only producer of a special kind of computer chip.Its patents assure that it will continue to be the only producer for at least the next decade.Chip production requires clean water.The firm gets its water from a river, which is being polluted by paper mills located upstream.Sandy Chip therefore has to process the water before using it.A recently enacted pollution-control program, whereby the paper mills will be fined for polluting the river, will result in less pollution and thus lower Sandy Chip's costs.Sandy Chip expects its marginal and average cost to fall by $20 per chip.
-(Exhibit: Chip Production) With the reduction in its costs, Sandy Chip will probably:

• A) lower its price by $20.
• B) lower its price, but by less than $20.
• C) lower its price, but by more than $20.
• D) It is not possible to make a determination from the information given.

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Definitions:

Physiological Responses

Automatic reactions of the body to internal or external stimuli, such as changes in heart rate, hormone levels, or muscle tension.

Facial Muscles

Muscles beneath the skin of the face, responsible for facial expressions and communication.

Eye Contact

A form of nonverbal communication that occurs when two individuals look directly into each other's eyes.

Simulating Anger

The act of pretending or mimicking the emotional state of anger, often used in psychological studies or acting.