Scenario 12.1: Suppose Mountain Spring Water Can Be Produced at No Cost

question 94

Multiple Choice

Scenario 12.1:
Suppose mountain spring water can be produced at no cost and that the demand and marginal revenue curves for mountain spring water are given as follows:
Q = 6000 - 5P MR = 1200 - 0.4Q
-Refer to Scenario 12.1. What will be the price in the long run if the industry is a Cournot duopoly?

• A) $400
• B) $600
• C) $800
• D) $900
• E) Competition will drive the price to zero.

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