A Firm Has Invented a New Beverage Called Slops

question 6

Multiple Choice

A firm has invented a new beverage called Slops.It doesn't taste very good, but it gives people a craving for Lawrence Welk's music and Professor Johnson's jokes.Some people are willing to pay money for this effect, so the demand for Slops is given by the equation q = 20 - p.Slops can be made at zero marginal cost from old-fashioned macroeconomics books dissolved in bathwater.But before any Slops can be produced, the firm must undertake a fixed cost of $105.Since the inventor has a patent on Slops, it can be a monopolist in this new industry.

• A)The firm will produce 10 units of Slops.
• B)From the point of view of social efficiency, it is best that no Slops be produced.
• C)A Pareto improvement could be achieved by having the government pay the firm a subsidy of $110 and insisting that the firm offer Slops at zero price.
• D)The firm will produce 20 units of Slops.
• E)None of the above.

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Definitions:

Incorporation Practices

Incorporation practices involve legal and procedural steps required to form and register a company as a separate legal entity, according to specific jurisdictional regulations.

Business Ownership

refers to the possession and control over a business enterprise, including the rights to make decisions and reap the benefits or losses.

Global Managers

Refers to managerial professionals who operate and make decisions within an international context, often dealing with cross-cultural and global business challenges.

International Developments

Activities, strategies, and policies designed to foster progress and positive change across nations on economic, social, and political levels.