An economist would say the price is too high for a certain service if
A)poor people couldn't afford to buy it.
B)nobody could afford to buy it.
C)the price was above marginal cost.
D)it is an essential service and consumes a significant share of income.

Question

Quizplus · Accepted Answer

An economist would say the price is too high if it is set above the marginal cost, which is the cost of producing one more unit of the service. If the price equals or is below the marginal cost, the provider will not be able to cover their costs and possibly even go out of business. However, if the price is above the marginal cost, it means that the provider is charging more than what it costs to produce the service, which could be seen as a form of exploitation or monopoly pricing. Therefore, a price that is above the marginal cost can be considered too high from an economic perspective. None of the other options provided directly relate to the concept of price being too high from an economic perspective.

An Economist Would Say the Price Is Too High for a Certain