A Small Nation Has Three Gasoline Suppliers with a Linear

question 91

Multiple Choice

A small nation has three gasoline suppliers with a linear monthly market demand equal to: Q = 500,000 - 5P. Each firm's marginal cost (MC) and average total cost (ATC) curves are horizontal at $10,000 per month.
-Refer to the information above. If the firms' managers form a price- fixing cartel that maximizes the firms' total profit, what is price charged in the market?

• A)$55,000
• B)$5,500
• C)$100,000
• D)$10,000

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Definitions:

Tax Rates

The percentage at which an individual or corporation is taxed.

Interest Rates

The price paid for the use of borrowed money or the earnings from an investment, represented as a percentage of the total amount invested or borrowed.

Consumer Durable

A category of consumer goods characterized by their long life span, such as appliances, vehicles, and furniture.

Business Investment

Expenditure made by businesses to purchase capital goods or services, aimed at furthering company growth and generating revenue.