Which of the Following Is True of an Information Good

question 42

Multiple Choice

Which of the following is true of an information good or service?

• A) In order to maximize profits, firms should set a high price because information goods are expensive to produce.
• B) The profit-maximizing price should be equal to the average fixed cost of producing the information good.
• C) Information goods are provided for free because the production cost of an information good is zero.
• D) The smaller the number of consumers using an information good, the higher the value obtained by other consumers.
• E) Information goods or services are characterized by high fixed costs but low or negligible marginal costs.

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Definitions:

Employee Motivation

The amount of enthusiasm, dedication, and innovation employees contribute to their roles in a corporation.

Herzberg

Refers to the two-factor theory by Frederick Herzberg, which posits that certain factors in the workplace result in job satisfaction, while others lead to dissatisfaction, hence differentiating between 'motivators' and 'hygiene factors'.

Taylor's Scientific

Refers to Taylor's Scientific Management Theory, emphasizing efficiency and productivity through the analysis and optimization of workflow.

Herzberg's Two-factor

A theory that suggests there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction.