A Method of Forcing a Company to Internalize the Total

question 283

Multiple Choice

A method of forcing a company to internalize the total cost of production is

• A) to impose a tax on the company to reduce production.
• B) to provide a subsidy to encourage production.
• C) for government not to interfere in the company's activities.
• D) to force the company to reduce the wages it pays to its employees.

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Definitions:

Unit Elastic

A situation where a change in price leads to an equal proportional change in the quantity demanded or supplied.

Price Elasticity

An assessment that depicts how variations in the price of a good affect the quantity of it that consumers want.

Oranges

Citrus fruits cherished for their juiciness, vibrant color, and sweet-tart flavor, often used in culinary dishes and beverages.

Complements

Goods or services that are used together such that the demand for one increases when the price of the other decreases.