Attempts Are Being Made to Develop a Biodegradable Plastic Using

question 51

Multiple Choice

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes.Identify a likely impact on the equilibrium price and quantity of potatoes if such attempts are successful,all other things remaining constant.

• A)The equilibrium price will increase and the equilibrium quantity will decrease.
• B)The equilibrium price will decrease and the equilibrium quantity will increase.
• C)Both equilibrium price and quantity will decrease.
• D)Both equilibrium price and quantity will increase.
• E)There will be no change in the equilibrium price and quantity.

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Definitions:

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business, used to assess the company's liquidity, financial flexibility, and overall financial health.

Interest Expense

Costs incurred by an entity for borrowed funds, typically presented as a line item on the income statement.

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventories.