Consider an Economy That Produces Only DVDs and DVD Players

question 74

Multiple Choice

Consider an economy that produces only DVDs and DVD players. If 10 DVDs are sold at $20 each and 5 DVD players are sold at $100 each, then nominal GDP is:

• A) $100.
• B) $700.
• C) $1,100.
• D) $900.

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Definitions:

Predatory Pricing

A strategy where a business sets very low prices with the intent to drive competitors out of the market or discourage new entries.

Market Prices

The current price at which goods or services can be bought or sold in the marketplace, influenced by supply and demand dynamics.

Differing Prices

The variation in pricing for goods or services in different markets, customer segments, or purchase situations.

Total Cost Curve

A graphical representation that shows the total cost of producing different quantities of a good or service, including both fixed and variable costs.