Suppose the Market for Oranges Is Perfectly Competitive and Unregulated

question 22

Multiple Choice

Suppose the market for oranges is perfectly competitive and unregulated.Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges.Suppose Q_D = 1000 - 100P and Q_S = -100 + 100P.The price consumers would have to pay for the market to achieve the socially optimal level of production is

• A) 5
• B) 5.5
• C) 6
• D) 6.5

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Definitions:

Annual Dividend

The total dividend payments made to shareholders in a year, typically expressed per share.

Rate of Return

The enhancement or reduction in worth of an investment across a specific duration, measured as a proportion of the investment's original cost.

First Dividends

The initial distribution of earnings paid to shareholders by a corporation that has just begun paying dividends.