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

question 77

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 firms in the industry collude with one another to maximize joint profit?

• A) $3
• B) $9
• C) $12
• D) $16.50
• E) none of the above

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