Using only marginal revenue and marginal cost, we can determine whether a firm is incurring a profit or a loss

Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Q 0 and that government purposely shifts the market supply curve from S to S 1 in diagram (a) on the left and from S to S 2 in

diagram (b) on the right. The shift of the supply curve from S to S 2 in diagram (b) might be caused by a per-unit:



A. subsidy paid to the producers of this product.
B. tax on the producers of this product.
C. subsidy paid to the buyers of this product.
D. tax on the buyers of this product.

As the uncertainty attached to a future payment ________, the expected value ________.

A. decreases; increases B. decreases; decreases C. increases; stays the same D. increases; becomes positive