eco212 week2 quiz - 1. If a price in a competitive market...

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1. If a price in a competitive market is “too high to clear the market,” what does this usually mean? Assume upward-sloping supply curves. a. No producer can cover the costs of production at that price. b. Quantity supplied exceeds quantity demanded at that price. c. Producers are leaving the industry. d. Consumers are willing to buy all the units produced at that price. Define the law of diminishing marginal utility. Provide an example. Law of Diminishing Marginal Utility Meaning: The marginal utility of a good or service is the change in utility (that is, satisfaction) that comes with an increase or decrease in the amount available of that good or service. The law of diminishing marginal utility says that beyond the first, the availability of one more unit of a good or service will normally return less utility than the one before. Law of Diminishing Marginal Utility Example: Consider water. A rational person will use the first unit of water that they are able to
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eco212 week2 quiz - 1. If a price in a competitive market...

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