Figure 71 Defending the Target Price in Face of Changing Demand

question 94

Multiple Choice

Figure 7.1. Defending the Target Price in Face of Changing Demand Conditions

-Consider Figure 7.1.Suppose the demand for tin decreases from D? to D?.Under a system of export quotas,the tin producers could maintain the target price by:

• A) Increasing the quantity of tin supplied by 15 pounds
• B) Increasing the quantity of tin supplied by 30 pounds
• C) Decreasing the quantity of tin supplied by 15 pounds
• D) Decreasing the quantity of tin supplied by 30 pounds

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Definitions:

Utility Function

An analytical model that illustrates how buyers prioritize various combinations of products based on the amount of pleasure or utility derived from those combinations.

Consumer's Surplus

The variance between the aggregate sum consumers intend and have the means to pay for a good or service, and the sum they actually pay.

Price of Earplugs

The cost at which earplugs are sold, reflecting manufacturing costs, market demand, and competitive pricing strategies.

Net Change

The difference in a financial instrument's closing price from one day to the next.