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

question 96

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 will be the price of this new drink in the long run if the industry is a Stackelberg duopoly?

• A) $3
• B) $9
• C) $12
• D) $13.50
• E) none of the above

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