-In the Above Figure,the Movement from Point a to Point

question 94

Multiple Choice

-In the above figure,the movement from point a to point b reflects

• A)an increase in the price of the tomato sauce used to produce pizza.
• B)an increase in the demand for pizza.
• C)a decrease in the number of firms producing pizza.
• D)an increase in the number of people who eat pizza.
• E)a decrease in the price of pizza.

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Definitions:

Tax

A compulsory financial charge or levy imposed by a government on individuals or businesses to fund public expenditures.

External Costs

Costs that are not borne by the parties involved in a transaction but rather by third parties or society as a whole.

Efficient Solution

An outcome wherein resources are allocated in the most effective way, maximizing benefits while minimizing costs or wastes.

Internalize Externalities

The process by which a firm takes into account the external costs or benefits of its activities, typically by incorporating them into its pricing structure.