Refer to the Graph Above, Where S_d and D_d Are

question 125

Multiple Choice

Refer to the graph above, where S_d and D_d are the domestic supply and demand curves for a product. The world price of the product is $6. If an import quota of 40 units were imposed on the product, then the equilibrium price would be:

• A) $6 and the quantity consumed 80 units
• B) $8 and the quantity consumed 70 units
• C) $10 and the quantity consumed 60 units
• D) $12 and the quantity consumed 50 units

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Definitions:

Dominant Strategy

In game theory, a strategy that is best for a player in a game regardless of the strategies chosen by the other players.

Economic Profit

The difference between revenue received from the sale of an output and the opportunity cost of the inputs used.

Nash Equilibrium

A concept in game theory where no player can benefit by changing their strategy while the other players keep theirs unchanged, representing a state of strategic balance.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs.