In order for a market to support superstars it must have which of the following characteristics ?
Correct answer: D. Every customer must want the good supplied by the best producer and the technology must exist for the best producer to supply every customer at low cost
- A. It must be involved in professional athletics
- B. Every customer must be indifferent to the price they pay, and the seller must be a competitor in the market for the product
- C. Every customer must be willing to pay an enormous amount for the product and the product must be a necessity
- D. Every customer must want the good supplied by the best producer and the technology must exist for the best producer to supply every customer at low cost
Explanation
A superstar market requires buyers to prefer the best producer and technology that lets that producer serve many customers at low marginal cost. These conditions produce very large rewards for small differences in talent.
Last updated
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,705 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Economics questions like this
Economics is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
Related questions
_____ 1954 study of U.S trade patterns showed that U.S exports were labor-intensive compared with U.S imports, even though the United States was widely regarded as a relatively capital-abundant nation ?
A attempts to limit outsourcing of jobs to foreigners by requiring that a minimum percentage of a product's value must be produced domestically if that good is to be sold in the domestic market ?
A binding price ceiling creates?
A borrower gives to creditor a security to grantee repayment of a loan. What is this security called ?
A buyer's willingness to pay is that buyer's ?