The Inverse Demand Function for Apples Is Defined by the Equation

question 23

Multiple Choice

The inverse demand function for apples is defined by the equation p = 214 - 5q, where q is the number of units sold. The inverse supply function is defined by p = 7 + 4q. A tax of $36 is imposed on suppliers for each unit of apples that they sell. When the tax is imposed, the quantity of apples sold falls to

• A) 23.
• B) 14.
• C) 17.
• D) 19.
• E) 21.

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Definitions:

Principle of Exceptions

A management principle where focus is directed towards cases that deviate significantly from the norm, allowing managers to concentrate on significant issues rather than routine matters.

Standard Costs

Predetermined or estimated costs to manufacture a product or provide a service, used in budgeting and measuring performance.

Budgeted Cost Systems

Accounting methods that use budgets to project costs and revenues, helping companies plan for future operations and financial performance.

Product Costs

The three components of manufacturing cost: direct materials, direct labor, and factory overhead costs.