Which of the Following Is a Necessary Condition for Government

question 83

Multiple Choice

Which of the following is a necessary condition for government subsidies to influence a firm to choose an output level as if it were a Stackelberg leader?

• A) The subsidy must be announced before the firms choose output levels.
• B) The subsidy must be equal to the firm's marginal cost.
• C) The subsidy must be equal to the firm's rival's marginal cost.
• D) The firm does not have any fixed costs.

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Definitions:

Over Budget

A situation in which actual spending exceeds the planned or allocated budget.

Investment Turnover

A ratio that measures the efficiency of a company in generating sales or revenue from its investment in assets.

Sales

The total revenue generated from goods or services sold by a company during a specified period.

Invested Assets

Invested assets refer to the resources put into financial instruments or assets with the expectation of earning a return, including stocks, bonds, real estate, and other investment vehicles.