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In the Absence of Economies of Scale, Advertising and Product

Question 208

Multiple Choice

In the absence of economies of scale, advertising and product differentiation:


A) reduce social welfare by increasing average total cost.
B) increase social welfare by giving consumers a greater variety of goods to choose from.
C) have an uncertain effect on welfare because they increase both average total cost and product variety.
D) benefit consumers if product variety increases.

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