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 69 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?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Did you know?

The most dangerous mercury compound, dimethyl mercury, is so toxic that even a few microliters spilled on the skin can cause death. Mercury has been shown to accumulate in higher amounts in the following types of fish than other types: swordfish, shark, mackerel, tilefish, crab, and tuna.

Did you know?

Blastomycosis is often misdiagnosed, resulting in tragic outcomes. It is caused by a fungus living in moist soil, in wooded areas of the United States and Canada. If inhaled, the fungus can cause mild breathing problems that may worsen and cause serious illness and even death.

Did you know?

Hip fractures are the most serious consequences of osteoporosis. The incidence of hip fractures increases with each decade among patients in their 60s to patients in their 90s for both women and men of all populations. Men and women older than 80 years of age show the highest incidence of hip fractures.

Block Diagram of a High Concentrate Nitric Acid System for Dual-Stage Pressure Production of Nitric Block Diagram of a High Concentrate Nitric Acid System for Dual-Stage Pressure Production of Nitric
Production-scale tangential flow filtration system. Production-scale tangential flow filtration system.
Conventional oil reserves have passed peak production Conventional oil reserves have passed peak production
British Iron Production, 1600–1870 British Iron Production, 1600–1870
Production and Prices in Richland and Poorland Production and Prices in Richland and Poorland
Please fully explain the answer with steps Please fully explain the answer with steps
Video: HDL (high density lipoprotein)

For a complete list of videos, visit our video library