-In the Above Figure, to Achieve Efficiency the Government Should

question 18

Multiple Choice

-In the above figure, to achieve efficiency the government should

• A) offer a subsidy of $2 per unit.
• B) impose a tax of $3 per unit.
• C) offer a subsidy of $3 per unit.
• D) impose a tax of $2 per unit.

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Definitions:

Inventory

The total amount of goods or materials a company holds, meant for sale or production.

Acid-Test Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Operating Expenses

Costs associated with the day-to-day functions of a business, excluding production costs.