Use the Following to Answer Question(s): Model of a Competitive

question 44

Multiple Choice

Use the following to answer question(s) : Model of a Competitive Market

-(Exhibit: Model of a Competitive Market) If there are external costs, a tax imposed on sellers will:

• A) decrease the equilibrium quantity.
• B) increase the equilibrium quantity.
• C) have no effect on the equilibrium price.
• D) decrease the equilibrium price.

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Definitions:

Market Value

The ongoing cost at which a service or asset is being exchanged in the market.

Extra Dividend

A one-time special payment made by a company to its shareholders, in addition to any regular dividends.

NPV Projects

Projects evaluated based on the Net Present Value method, a valuation technique that discounts the expected future cash flows to the present using a specific rate, to determine the profitability and viability.

Total Wealth

The combined value of all financial and non-financial assets owned by an individual or entity.