The Figure Given Below Represents an Imperfectly Competitive Resource Market

question 45

Multiple Choice

The figure given below represents an imperfectly competitive resource market. Here common land (and not land used for specific purpose) is under consideration.Figure 18.1

-On account of a massive construction boom in a country, the demand for iron ore increases substantially. This causes iron ore prices to escalate. Producers increase iron ore mining considerably in the short run, in spite of knowing that this will adversely affect future availability of ore. Which of the following is most similar to the scenario described above?

• A)Corn producers hoard their supplies in order to induce a price hike.
• B)Petroleum manufacturers increase extraction in response to sky-rocketing fuel prices.
• C)The government of a country makes aforestation mandatory for lumber firms.
• D)Impressive revenue generation induces the government of a country to impose additional fuel surcharge.
• E)To discourage smoking, the government of a country increases sales tax on cigarettes.

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Definitions:

Clinical Trials

Research investigations in which human participants are assigned to test the effectiveness and safety of new treatments or interventions.

Terminal Value

In finance, the terminal value estimates a business's worth at the end of all forecasted cash flows, typically beyond a five-year projection.

Market Potential

The total demand for a product or service within a market at a given time, assuming full marketing activities.

Covariance

A statistical measure that indicates the extent to which two variables change together; if positive, the variables move in the same direction, and if negative, they move in opposite directions.