The Demand for Cars in a Certain Country Is Given

question 14

Multiple Choice

The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy opens to trade while the world price of a car is $6,000, and the government imposes a quota allowing 3,000 cars to be imported, then domestic equilibrium quantity of cars will be ________.

• A)6,000
• B)8,000
• C)10,000
• D)12,000

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Definitions:

Accumulated Depreciation

The total amount of an asset's cost that has been allocated as depreciation expense since the asset was put into use, representing how much of the asset's value has been used up.

Item's Cost

The purchase price or production cost of an item, including expenses directly attributable to its acquisition or manufacture.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for a fixed asset over its useful life.

Disposal

The act of selling or getting rid of an asset or a portion of a business.