Why a favorable shock to production function tends

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Q. If you purchased a new model of a digital camera right after it is released, you will likely pay more than if you purchase it six months after release. Explain why this is an example of price discrimination on the part of the firm

Q. Why a favorable shock to the production function tends to reduce the price level, P. How could the monetary authority prevent this fall in P?

 

Reference no: EM1351749

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