In the Absence of Government Interference, There Is a Constant

question 27

Multiple Choice

in the absence of government interference, there is a constant marginal cost of $5 per ounce for growing marijuana and delivering it to buyers.If the probability that any shipment of marijuana seized is .50 and the fine if a shipper caught is $40 per ounce, then the equilibrium price of marijuana per ounce is

• A)$50.
• B)$45.
• C)$2.50.
• D)$25.
• E)$7.50.

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Definitions:

Indirect Method

A way of preparing a cash flow statement where net income is adjusted for changes in balance sheet accounts to reflect cash transactions.

Sale Of Fixed Assets

The process of selling long-term assets such as property, plant, and equipment for cash or other compensation.

Operating Activities

Business functions related to the core operations of a company, generating the majority of its revenue and expenses.

Accumulated Depreciation

The total amount of an asset's cost that has been expensed since the time it was put into use.