The Figure Given Below Represents an Imperfectly Competitive Resource Market

question 45

Multiple Choice

The figure given below represents an imperfectly competitive resource market. Here common land (and not land used for specific purpose) is under consideration.Figure 18.1

-On account of a massive construction boom in a country, the demand for iron ore increases substantially. This causes iron ore prices to escalate. Producers increase iron ore mining considerably in the short run, in spite of knowing that this will adversely affect future availability of ore. Which of the following is most similar to the scenario described above?

• A)Corn producers hoard their supplies in order to induce a price hike.
• B)Petroleum manufacturers increase extraction in response to sky-rocketing fuel prices.
• C)The government of a country makes aforestation mandatory for lumber firms.
• D)Impressive revenue generation induces the government of a country to impose additional fuel surcharge.
• E)To discourage smoking, the government of a country increases sales tax on cigarettes.

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Definitions:

Retained Earnings

Retained earnings refer to the cumulative amount of net income a company retains, rather than distributing it to shareholders as dividends.

Net Income

The remainder of a company's total revenue after deducting taxes, expenses, and any other costs.

Shareholders' Equity

The portion of the company's assets that belongs to the shareholders after all liabilities have been subtracted.

Dividends in Arrears

Unpaid dividends of cumulative preferred stock for the designated period.