The Switch to the Use of Ethanol in Gasoline Is

question 40

Multiple Choice

The switch to the use of ethanol in gasoline is driven primarily by its relatively lower price.Assuming a competitive market,what effect would this change have on the equilibrium price and output for gasoline?

• A)Price rises,output falls.
• B)Price falls,output rises.
• C)Price rises,output rises.
• D)Price falls,output falls.

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Definitions:

Profit (Loss)

The financial result of operations, where profit indicates revenue exceeds expenses, and loss indicates expenses exceed revenue.

Sale Price

The final price of a product or service after any discounts or promotions have been applied.

Net Profit

The total earnings after all expenses and taxes have been subtracted from revenue.

Overhead Expenses

costs related to the day-to-day running of a business but not directly tied to producing goods or services.