Suppose That the World Price of Sugar Is $100 Per

question 30

Multiple Choice

Suppose that the world price of sugar is $100 per ton. If a large country gives its sugar exporters a subsidy of $50 per ton, then the world price of sugar will:

• A) fall by less than $50 per ton.
• B) fall by $50 per ton.
• C) remain at $100 per ton.
• D) rise to $50 per ton.

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Definitions:

Five Forces Model

A framework developed by Michael E. Porter to analyze a business's competitive environment in five key areas: competitive rivalry, the threat of new entrants, the threat of substitute products, the bargaining power of suppliers, and the bargaining power of buyers.

Competitive Forces

External factors that influence the competitive position of a firm within an industry, including competition, potential entrants, substitutes, buyers, and suppliers.

Profitability

A measurement of the efficiency and effectiveness of a company at generating profits from its operations.

Competition And Profitability

The relationship between the competitiveness of a market and the ability of firms within that market to generate profits.