The Domestic Market for Calculators Is Perfectly Competitive and Is $Q ^ { d } = 100 - P$

question 40

Multiple Choice

The domestic market for calculators is perfectly competitive and is in equilibrium. Domestic demand is given by $Q ^ { d } = 100 - P$ and domestic supply is given by $Q ^ { s } = 4 P$ . The world price for calculators is $\$ 10$ . Now, a tariff of $\$ 10$ is imposed on all imports. How many units of calculators will be imported now?

• A) 0
• B) 10
• C) 30
• D) 50

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Definitions:

WACC

An assessment of a firm's cost of capital, where each category of capital is proportionally weighted to calculate the average cost.

Marginal Costs

Marginal costs refer to the change in total cost that arises when the quantity produced is incremented by one unit.

Target Capital Structure

Target capital structure is the proportional combination of debt, equity, and other financing sources a company aims to maintain.

Discounted Cash Flow

A valuation method used to estimate the value of an investment based on its expected future cash flows.