This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Explain why a voluntary production quota is difficult to operate. What will be an ideal ... (Read 65 times)

Deast7027

  • Hero Member
  • *****
  • Posts: 538
on: Jun 29, 2018
Explain why a voluntary production quota is difficult to operate.
 
  What will be an ideal response?

Question 2

Refer to Scenario 1-3. Had the firm not produced and sold the last 400 t-shirts, would its profit be higher or lower, and if so by how much?
 
  A) Its profit would be 800 higher. B) Its profit would be 4,000 lower.
  C) Its profit would be 4,800 higher. D) Its profit would be 800 lower.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

spencer.martell

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jun 29, 2018
Answer to Question 1

A voluntary quota is difficult to operate because a production quota results in a massive incentive to cheat on the production quota by increasing production. A production quota decreases the quantity produced. By decreasing the quantity produced, a production quota raises the price and reduces the marginal social cost of the last unit produced. Because the price exceeds the marginal social cost, producers have an incentive to increase their production (beyond the quota amount) to boost their profit.

Answer to Question 2

A


Deast7027

  • Hero Member
  • *****
  • Posts: 538
Reply #2 on: Jun 29, 2018
Thank you


spencer.martell

  • Sr. Member
  • ****
  • Posts: 342
Reply #3 on: Jun 29, 2018
No problemo


« previous next »
 

Did you know?

The Centers for Disease Control and Prevention (CDC) was originally known as the Communicable Disease Center, which was formed to fight malaria. It was originally headquartered in Atlanta, Georgia, since the Southern states faced the worst threat from malaria.

Did you know?

About one in five American adults and teenagers have had a genital herpes infection—and most of them don't know it. People with genital herpes have at least twice the risk of becoming infected with HIV if exposed to it than those people who do not have genital herpes.

Did you know?

For pediatric patients, intravenous fluids are the most commonly cited products involved in medication errors that are reported to the USP.

Did you know?

It is believed that the Incas used anesthesia. Evidence supports the theory that shamans chewed cocoa leaves and drilled holes into the heads of patients (letting evil spirits escape), spitting into the wounds they made. The mixture of cocaine, saliva, and resin numbed the site enough to allow hours of drilling.

Did you know?

In 1864, the first barbiturate (barbituric acid) was synthesized.

El Niño and areas of high marine primary production around the Galapagos Islands. Noti El Niño and areas of high marine primary production around the Galapagos Islands. Noti
How difficult is it for children to learn to speak two languages? How difficult is it for children to learn to speak two languages?
Block Diagram of Single-stage Pressure System for Dual-Stage Pressure Production of Nitric Acid Block Diagram of Single-stage Pressure System for Dual-Stage Pressure Production of Nitric Acid
Human of the planet's net primary production and appropriation of NPP Human of the planet's net primary production and appropriation of NPP
World Crude Oil Production, 1900–2010 World Crude Oil Production, 1900–2010
Explain the assumptions that must be satisfied in order to validly use the one-way ANOVA ... Explain the assumptions that must be satisfied in order to validly use the one-way ANOVA ...
Video: Factors that influence muscle tension - Sarcomere length and force, understretched and overstretched

For a complete list of videos, visit our video library