Suppose That Recycling Rubber for Running Shoes Creates an External

question 31

Multiple Choice

Suppose that recycling rubber for running shoes creates an external benefit of $2.00 per tonne of rubber.There are no external costs.The efficient amount of rubber will be recycled when the government creates a

• A)subsidy of more than $2.00 per tonne of rubber.
• B)subsidy of $2.00 per tonne of rubber.
• C)tax of more than $2.00 per tonne of rubber.
• D)tax of $2.00 per tonne of rubber.
• E)voucher valued at $2.10 a tonne of rubber.

Analyze the effects of firm behaviors on competitors and how it informs competitive strategies.

Understand the limitations of using concentration ratios for analyzing industry competitiveness.

Understand the concept of the kinked demand curve and its association with oligopolistic competition.

Identify different demand curves associated with various market structures, including cutthroat oligopolies.

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Definitions:

Break-even Analysis

A calculation to determine the point at which revenue received equals the costs associated with receiving the revenue, indicating no net loss or gain.

Cost-plus Pricing

A pricing strategy where the selling price is determined by adding a specific markup to a product's unit cost.

Product Differentiation

The process of distinguishing a product or service from others to make it more attractive to a particular target market.

Inelastic Demand

A situation in which the demand for a product or service is relatively unaffected by changes in price.