Suppose the Market for Oranges Is Perfectly Competitive and Unregulated

question 1

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.If regulators limited production to 200 bushels,the deadweight loss relative to the option of setting the optimal tax would be would be

• A) $0
• B) $200
• C) $500
• D) $1000

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Definitions:

Working Capital

The disparity between a firm's existing resources and its short-term obligations, showcasing its ability to fulfil financial commitments and operational prowess.

Current Assets

Resources anticipated to be transformed into cash, sold off, or used up either within a year or over the span of the business's regular operational cycle, depending on which is more extended.

Current Liabilities

Short-term financial obligations that a company is expected to pay within one year.

Reasonably Possible

A term used in accounting and legal contexts to describe outcomes that are more than remote but less than likely.