A Theory Asserts That Manufacturers Are Less Willing to Sell

question 108

Multiple Choice

A theory asserts that manufacturers are less willing to sell units of output as the price of a good decreases, ceteris paribus. However, as the price of computers fell throughout the 1990s, more computers were sold. Which of the following best explains the apparent conflict between theory and data?

• A)​The theory must be invalid.
• B)​The theory rests on assumptions that are too simplistic.
• C)​It is likely that variables other than the price and quantity of computers sold were changing.
• D)​All variables other than the price and quantity of computers sold were unchanged.

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Definitions:

Antitrust Laws

Laws designed to promote competition and prevent monopolies by regulating business practices that may restrain trade or lead to an unfair concentration of market power.

Deceptive Advertising

Marketing practices that mislead or deceive consumers into believing something about a product or service that is not true or fully disclosed.

Celler-Kefauver Act

A United States antitrust law passed in 1950, aimed at preventing anti-competitive mergers and acquisitions by closing loopholes in the earlier Clayton Antitrust Act.

Clayton Act

A United States antitrust law enacted in 1914, aimed at promoting competition by preventing unfair business practices such as price discrimination and exclusive dealings.