If Markets Are Perfect,a Rational Actor May Reasonably Conclude from the High

question 21

Multiple Choice

If markets are perfect,a rational actor may reasonably conclude from the high price of a good that the good

• A)is produced by a monopoly.
• B)is of better quality.
• C)has a greater demand for it.
• D)is not known about by other consumers.

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Definitions:

Spillover Benefits

These are benefits experienced by those who are not directly involved in economic transactions or activities; they result from the positive externalities of such transactions.

Advertising

The act of promoting products, services, or brands through various media channels to inform, persuade, and influence purchasing decisions.

Socially Inefficient

A situation where resources are not allocated in the most beneficial way for society as a whole, often resulting in market failure.

Advertising

The action or business of promoting and selling products or services, including market research and advertising.