Assume That the Demand for Boats as Shown in the Figure

question 9

Multiple Choice

Assume that the demand for boats as shown in the figure below is P = $500 - 10Q, while the supply is P = $100 + 10Q.Market equilibrium would then be:

• A)P = 20, Q = 300
• B)P = 300, Q = 20
• C)P = 20, Q = 20
• D)P = 500, Q = 500
• E)None of the above.

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Definitions:

Tragedy of the Commons

An economic problem in which every individual tries to reap the greatest benefit from a given resource, leading to overuse and depletion of the resource to the detriment of all.

Externalities

Economic side effects or consequences of commercial activities that affect other parties without being reflected in the cost of the goods or services involved.

Common Resources

Resources that are accessible to all members of a society but are susceptible to overutilization and depletion.

Private Good

A product or service that is excludable and rival in consumption, meaning only those who pay for it can consume it, and one person’s consumption prevents another's.