If Enforcement Is Aimed at Sellers of an Illegal Good,the

question 15

Multiple Choice

If enforcement is aimed at sellers of an illegal good,the

• A)price and quantity bought decrease.
• B)price and quantity bought increase.
• C)price rises and quantity bought decreases.
• D)price falls and quantity bought increases.
• E)price change is uncertain and quantity bought decreases.

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Definitions:

Economic Profit

A financial gain that exceeds both the explicit and implicit costs associated with business operations.

Natural Monopolist

A firm that can supply the entire market at a lower cost than any combination of two or more smaller firms, often due to economies of scale.

Maximum Price

A price ceiling set by authorities to prevent prices from going above a certain level, often to make goods affordable.

Pure Monopolist

A market structure wherein a single company exclusively controls the entire market for a particular good or service, facing no competition.