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 66 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?

Urine turns bright yellow if larger than normal amounts of certain substances are consumed; one of these substances is asparagus.

Did you know?

Oxytocin is recommended only for pregnancies that have a medical reason for inducing labor (such as eclampsia) and is not recommended for elective procedures or for making the birthing process more convenient.

Did you know?

Of the estimated 2 million heroin users in the United States, 600,000–800,000 are considered hardcore addicts. Heroin addiction is considered to be one of the hardest addictions to recover from.

Did you know?

Allergies play a major part in the health of children. The most prevalent childhood allergies are milk, egg, soy, wheat, peanuts, tree nuts, and seafood.

Did you know?

There are over 65,000 known species of protozoa. About 10,000 species are parasitic.

Most PCV valves used on newer vehicles are secured with fasteners, which makes it more difficult ... Most PCV valves used on newer vehicles are secured with fasteners, which makes it more difficult ...
Production of monoclonal antibodies Production of monoclonal antibodies
Control of the cell cycle by cyclin-dependent kinases, and the checkpoints at which they operate Control of the cell cycle by cyclin-dependent kinases, and the checkpoints at which they operate
World Crude Oil Production, 1900–2010 World Crude Oil Production, 1900–2010
Production of ATP in Skeletal Muscle Production of ATP in Skeletal Muscle
Satellite data showing net primary production. Productivity is coded as red (highest) down through o Satellite data showing net primary production. Productivity is coded as red (highest) down through o
Video: Types of antimicrobial substances (interferons & complement protein)

For a complete list of videos, visit our video library