Scenario 12.3: Suppose a Stream Is Discovered Whose Water Has Remarkable Healing

question 59

Multiple Choice

Scenario 12.3:
Suppose a stream is discovered whose water has remarkable healing powers. You decide to bottle the liquid and sell it. The market demand curve is linear and is given as follows:
P = 30 - Q
The marginal cost to produce this new drink is $3.
-Refer to Scenario 12.3. What price would this new drink sell for if it sold in a competitive market?

• A) 0
• B) $3
• C) $13.50
• D) $16.50
• E) $27

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Definitions:

Social Exchange Theory

A theory that explains social change and stability as a process of negotiated exchanges between parties, predicting human relationships based on perceived costs and benefits.

Equity Theory

A theory that focuses on the fairness of outcomes that individuals receive in an organization, which influences their motivation and satisfaction.

Mere Exposure Effect

The tendency to prefer stimuli that we've been repeatedly exposed to, regardless of the stimuli's inherent qualities.

Brand Name

The name given to a particular product or service by its manufacturer or provider, used to distinguish it from competitors in the market.