In the Case of a Technology Spillover, Internalizing a Positive

question 522

Multiple Choice

In the case of a technology spillover, internalizing a positive externality through a government subsidy will cause the industry's supply curve to

• A)shift up by an amount equal to the subsidy.
• B)shift down by an amount less than the subsidy.
• C)shift down by an amount equal to the subsidy.
• D)shift down by an amount greater than the subsidy.

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Definitions:

Profit (or Loss) Per Unit

The amount of money gained or lost on each unit of a product sold, calculated as the difference between the selling price and the cost of production.

Total Profit

is the financial gain made by a business after subtracting all expenses, taxes, and costs associated with generating the revenue.

Profit Per Unit

The amount of profit generated by selling one unit of a product or service.

Profit Maximizing

The process or strategy employed by businesses to increase their profits to the highest possible level given their resources and constraints.