A New Per Unit Subsidy for Hybrid Car Production Increases

question 152

Multiple Choice

A new per unit subsidy for hybrid car production increases the supply of hybrid cars. If hybrid cars are elastically demanded, what will happen to total revenues from hybrid car production?

• A) They will rise.
• B) They will fall.
• C) They will remain the same.
• D) They will change in an indeterminate direction.

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Definitions:

Quantitative Approach

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Managerial Judgement

The process by which managers make decisions based on a combination of factors including data analysis, experience, and intuitive understanding.

Mathematical Solutions

Answers or outcomes derived through the application of mathematical methods and reasoning.

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The highest level in Maslow's hierarchy of needs, representing the fulfillment of personal potential and self-fulfillment.