An online streaming service charges $20 per month for its premium plan. The cost for the service to support one additional subscriber is $3 per month. A potential customer, Jordan, values the service at $15 per month and therefore does not subscribe. Which of the following statements best analyzes this situation from an economic efficiency perspective?
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A company that produces a unique type of headphones sells them for $150 per pair. The cost to produce one additional pair is $40. This pricing strategy results in an inefficient market outcome because some potential customers are willing to pay more than $40 but less than $150 for the headphones, yet no transaction occurs. The value of these lost, mutually beneficial transactions is referred to as __________.
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An online streaming service charges $20 per month for its premium plan. The cost for the service to support one additional subscriber is $3 per month. A potential customer, Jordan, values the service at $15 per month and therefore does not subscribe. Which of the following statements best analyzes this situation from an economic efficiency perspective?
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Pricing Above Marginal Cost as a Misleading Price Signal