Suppose That Government Decides to Create a License for Widget

question 83

Multiple Choice

Suppose that government decides to create a license for widget makers.Only licensed widget makers are allowed to produce widgets.Moreover,only half of the current widget producers are eligible to obtain the license.What will happen with the supply curve of widgets?

• A) It will not change.
• B) It will shift to the left.
• C) It will shift to the right.
• D) It will slope downwards.

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Definitions:

Average Operating Assets

The average value of assets used in the production process or in generating sales, calculated over a specific period.

Margin

Net operating income divided by sales.

Average Operating Assets

The average value of assets used during a specific period in the day-to-day operations of a business.

Net Operating Income

An entity's income from operations, calculated by subtracting operating expenses from revenues generated from normal business operations, excluding non-operating income and expenses.