Which of the Following Raises the Price of a Used

question 200

Multiple Choice

Which of the following raises the price of a used car and increases the equilibrium quantity sold?

• A) a new 8 percent federal excise tax placed on all new car purchases
• B) an increase in wages for used car salespeople
• C) a special rebate program on all new cars
• D) None of the above answers is correct

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Definitions:

Oligopoly Market

A market structure characterized by a few firms dominating the industry, leading to limited competition.

Concentration Ratio

A measure used to indicate the level of competition within an industry by quantifying the market share held by the largest firms.

Industry Output

The total amount of goods or services produced by all firms within a particular industry.

Five Forces Model

A framework developed by Michael E. Porter to analyze a business's competitive environment in five key areas: competitive rivalry, the threat of new entrants, the threat of substitute products, the bargaining power of suppliers, and the bargaining power of buyers.