Exhibit 4-4 -Refer to Exhibit 4-4.Which of the Following Is False

question 74

Multiple Choice

Exhibit 4-4
-Refer to Exhibit 4-4.Which of the following is false?

• A)Graph (1): There is a shortage when price is P₃.
• B)Graph (2): As supply increases,equilibrium quantity remains constant.
• C)Graph (3): As demand increases,equilibrium price remains constant.
• D)Graph (4): As supply changes,equilibrium price stays the same.

Recognize the role and arguments for and against advertising in monopolistically competitive markets.

Identify the strategies monopolistically competitive firms use to gain market power and differentiate their products.

Comprehend the importance of product differentiation and the forms it can take (horizontal and vertical).

Analyze the impact of the Internet on advertising and market behavior.

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Definitions:

Bichromat

An individual with the ability to perceive only two of the three primary colors due to a form of color vision deficiency.

Monochromat

A person who is sensitive to black and white only and hence color–blind.

Sensitization

An increase in responsiveness to a stimulus following its repeated presentation, often leading to the enhancement of a response.

Basilar Membrane

A membrane in the cochlea of the inner ear; it plays a crucial role in the sense of hearing by vibrating in response to sound waves.