Assume the Demand Function for Basketballs Is Given by QD

question 18

Multiple Choice

Assume the demand function for basketballs is given by QD = 150 - 3P + 0.1I, where P = price of a basketball, and I = average income of consumers. Also, assume the supply of basketballs is given by QS =2P. If the market for basketballs is perfectly competitive, and the average income is equal to $1,500, what are the equilibrium price and quantity? What if a 20% income tax is introduced?

• A) Before the tax, the equilibrium price is $60, and 120 basketballs are traded. The introduction of an income tax would have no effect on the equilibrium price net of the tax and quantity.
• B) Before the tax, the equilibrium price is $60, and 120 basketballs are traded. Once the income tax is introduced, the price would decrease by $6, and only 108 basketballs would be traded.
• C) Before the tax, the equilibrium price is $60, and 120 basketballs are traded. Once the income tax is introduced, the price would decrease by $6, which would cause the quantity of basketballs traded to increase.
• D) Before the tax, the equilibrium price is $60, and 108 basketballs are traded. Once the income tax is introduced, the price would decrease by $6, and only 120 basketballs would be traded.

Acknowledge the importance of converting weaknesses into strengths or managing them as limitations.

Realize the critical role of setting and aligning goals and objectives in strategic marketing planning.

Recognize the essential elements of strategic focus in the context of competition.

Understand the difference between goals and objectives.

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Definitions:

Reuptake

The process by which neurotransmitters are taken back into the synaptic vesicles of the neuron after being released into the synaptic cleft.

Opiate Drugs

A classification of narcotics derived from the opium poppy plant, often used for pain relief but also associated with a high potential for addiction and abuse.

Endorphins

Naturally occurring peptides in the brain that act as neurotransmitters and have pain-relieving properties similar to morphine.

Agitation

A state of anxiety or nervous excitement, often manifesting as restless or tumultuous behavior.