Suppose the government taxes a company that produces plastic water bottles and at the same time consumers become hesitant to use plastic water bottles due to the fear of toxins in the plastic. What would happen in the market to the equilibrium price and quantity of plastic water bottles?
A. Price increases and quantity is indeterminate.
B. Quantity decreases and price is indeterminate.
C. Quantity increases and price is indeterminate.
D. Price decreases and quantity is indeterminate.
Answer: B
You might also like to view...
The table below describes the relationship between the number of workers hired by a call center each hour and the number of calls the call center can make each hour. The call center has only 1 telephone. The telephone costs the firm $5/hour (regardless of how many calls are made), and each worker is paid $10 per hour.Calls PerHourNumber ofTelephonesPer HourNumber ofWorkersPer Hour0$0$01$30$1002$40$1603$60$1904$100$2105$150$2206$210$225If the price of a telephone increases to from $5 to $10 an hour and nothing else changes, then:
A. total cost would not change. B. marginal cost would not change. C. fixed cost could not change. D. marginal cost would increase by $5 at every level of output.
Everything else held constant, an increase in net exports ________ aggregate ________
A) increases; demand B) decreases; demand C) decreases; supply D) increases; supply
Many gourmet shops go out of business during recessions since they sell almost exclusively:
A. substitutes. B. normal goods. C. inferior goods. D. complements.
If Tyson Corporation, a firm that raises and processes chickens, combines with Kentucky Fried Chicken, the resulting merger would be an example of a:
A. Horizontal merger B. Geographic merger C. Vertical merger D. Conglomerate merger