If the MPC Is 0

question 258

Multiple Choice

If the MPC is 0.5,then a $10 million increase in disposable income will increase consumption by

• A)$2 million.
• B)$5 million.
• C)$15 million
• D)$50 million.

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Definitions:

Standardized Product

Products that are uniform in quality and features, offering no significant difference from the same products offered by other sellers.

Differentiated Product

A product that is distinct from similar products offered by competitors, often through quality, features, or branding.

Kinked Demand Curve

A demand curve in oligopolistic market structures characterized by a distinct bend or kink at the current price; it reflects that price increases by one firm will not be followed by others, while price decreases will be.

Price Cut

A reduction in the selling price of products or services, often used as a strategy to increase consumer demand or compete more effectively.