Answer:
The Output Effect
Explanation:
What is the Output Effect???
Definition: The situation in which an increase in the price of one input will increase a firm's production costs and reduce its level of output, this reducing the demand for other inputs; conversely for a decrease in the price of the input.
If the price of steak rises, a consumer who had been maximizing his or her utility before will buy less steak because its "marginal utility to price ratio is now lower than for other items."
<h3>What is
marginal utility?</h3>
In economics, marginal utility is the optimum quality or benefit (utility) which a buyer receives by purchasing an additional units of a product or service.
Some key features regrading the marginal utility are-
- The concept means that the utility and benefit of an extra unit of a product to a consumer is proportional to the quantity of units of such a product he currently owns.
- The given example shows marginal usefulness.
- The marginal value of one piece of bread provided to a family of seven will be considerable, because the family will be less hungry, as well as the difference between 7 and 8 is proportionally significant.
- A extra bread slice supplied to a family with 30 slices, on the other hand, has less marginal utility so because difference among 30 & 31 is proportionally lower and the family's hunger has already been satisfied.
- Thus, as a consumer of a product purchases further and more of the commodity, his marginal utility drops until he has no need for any extra units at all.
- The marginal utility then is equal to zero.
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Answer:
Novation.
Explanation:
In this scenario, Shannon and Rene are sisters who enter into a contract to buy an income property. The sisters get into a dispute, and Shannon wants out of the deal. However, their uncle Jerry wants to replace Shannon on the contract. Shannon agrees to the substitution so they go ahead and do it. This is an example of novation.
Novation can be defined as the process or an act of legally replacing a party in a contract with another, adding an obligation to engage or replacing a contractual obligation to perform with another based on the consent of all involved parties.
Answer:
Higher prices
Explanation:
Fixed prices are associated with higher prices for consumers
