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The Inverse Demand Function for Grapefruit Is Defined by the Equation

question 17

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The inverse demand function for grapefruit is defined by the equation p = 145 - 6q, where q is the number of units sold.The inverse supply function is defined by p = 5 + 4q.A tax of $20 is imposed on suppliers for each unit of grapefruit that they sell.When the tax is imposed, the quantity of grapefruit sold falls to


Definitions:

Marginal Benefit

The enhanced pleasure or utility that comes from consuming an extra unit of a product or service.

Marginal Cost

The cost incurred by producing one additional unit of a product or service, crucial for decision-making in production levels.

Optimal Amount

The ideal quantity of a resource or good that achieves the best outcome or utility.

Positive Externalities

Benefits that result from a commercial activity or action but affect uninvolved third parties who did not choose to be involved in the transaction.

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