As Part of Its Proposal to Win the 2012 Olympics,London

question 292

Multiple Choice

As part of its proposal to win the 2012 Olympics,London developed a carbon offset plan to reduce the Games' impact on the environment.In 2011,the organizers decided to drop this plan to reduce emissions.We can conclude that

• A) the marginal cost of reducing emissions exceeded the marginal benefits of reducing emissions.
• B) the organizers are not making a rational decision.
• C) the organizers are ignoring a sunk cost.
• D) there are no incentives to reduce carbon emissions.
• E) it is difficult to calculate the cost of reducing emissions.

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Definitions:

Barriers to Entry

Factors that prevent or hinder companies from entering a specific market or industry.

Monopoly Power

The significant control or exclusive possession of the market by a single entity, allowing it to influence price or terms of sale for goods and services.

Inelastic Portion

Part of the demand curve where the quantity demanded changes minimally in response to price changes.

Marginal Revenue

The additional income gained from selling one more unit of a product or service.