Suppose Consumption Is $7,500 When Income Is $4,000 and the MPS

question 205

Multiple Choice

Suppose consumption is $7,500 when income is $4,000 and the MPS equals 0.4. When income increases to $6,000, consumption is

• A) $8,050.
• B) $8,300.
• C) $8,700.
• D) $9,500.

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Definitions:

Robinson-Patman Act

A United States federal law that prohibits anticompetitive practices by producers, specifically price discrimination.

Price Discrimination

The practice of selling the same product or service at different prices to different customers, not based on differences in costs.

Retailers

Businesses that sell goods or services directly to consumers.

Clayton Act

A U.S. antitrust law, enacted in 1914, aimed at promoting fair competition and preventing monopolies by prohibiting certain anti-competitive practices.