A ________ Creates a Situation in Which the Price Received

question 133

Multiple Choice

A ________ creates a situation in which the price received by sellers ________ the price paid by buyers.

• A) tax; exceeds
• B) tax; equals
• C) subsidy; is less than
• D) subsidy; exceeds

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Definitions:

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, representing surplus remaining after all costs have been paid.

Entry Barriers

Obstacles that prevent or hinder new competitors from easily entering an industry or area of business.

Total Profit

The financial gain obtained by subtracting total expenses from total revenue generated from sales or operations.

MR

Marginal Revenue, the additional income that an organization earns by selling one more unit of a product or service.