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A subsidy to wheat farmers decreases the price of a bushel of wheat from $2.50 to $2 per bushel. Prior to the subsidy, the equilibrium quantity of wheat sold was equal to 200,000 bushels. If the demand for wheat is known to be unit elastic, then after the imposition of the subsidy, _____ bushels of wheat would be sold in the market.
Marginal Cost
The increase in total cost that arises from producing an additional unit of output, reflecting the cost of producing one more unit.
Marginal Revenue
The added revenue that comes from the sale of an extra unit of a good or service.
Exiting an Industry
The process whereby businesses cease operations in a specific sector due to various reasons, such as unprofitability, strategic realignment, or market saturation.
Shutting Down
A short-term decision by a firm to halt production due to market conditions, not necessarily implying going out of business.
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