# Supply and Demand and Correct Answer

3592 words 15 pages
* Question 1
0 out of 1 points | | | Duopolists A and B face the following demand curves: QA = 120  2PA + PB and QB = 120  2PB + PA. If both firms have zero marginal cost and they form a cartel, what is the profit-maximizing price and quantity?Answer | | | | | Correct Answer: | a. P = 60, Q = 120 | | | | | * Question 2
1 out of 1 points | | | Total surplus in a market is a measure of:Answer | | | | | Correct Answer: | c. social welfare created by the market | | | | | * Question 3
1 out of 1 points | | | The long-run average cost curve slopes downward if there are:Answer | | | | | Correct Answer: | e. economies of scale | | | | | * Question 4
1 out of 1 points
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are consistent with increasing returns to scale | | | | | * Question 21
0 out of 1 points | | | If elasticity of demand is 2, marginal cost is \$4, and average cost is \$6, a profit-maximizing markup price is:Answer | | | | | Correct Answer: | d. \$8 | | | | | * Question 22
0 out of 1 points | | | A straight line drawn from the origin is tangent to a short-run production function with only one input, labor. At the quantity of labor where the tangency occurs:Answer | | | | | Correct Answer: | d. the average product of labor is at a maximum | | | | | * Question 23
0 out of 1 points | | | Two local ready-mix cement manufacturers, Here and There, have combined demand given by Q = 105  P. Their total costs are given by TCHere = 5QHere + 0.5Q2Here and TCThere = 5QThere + 0.5Q2Here. If they cannot successfully collude and instead produce where the market price equals marginal cost, their total output will be:Answer | | | | | Correct Answer: | e. 66.67 | | | | | * Question 24
0 out of 1 points | | | A profit-maximizing firm sets its price:Answer | | | | | Correct Answer: | b. where demand is elastic | | | | | * Question 25
1 out of 1 points | | | Please use the following information to answer the following questions. Suppose duopolists in the market for spring water share a market demand curve

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