Table 17-5

question 200

Multiple Choice

Table 17-5. Imagine a small town in which only two residents, Kunal and Naj, own wells that produce safe drinking water. Each week Kunal and Naj work together to decide how many gallons of water to pump, to bring the water to town, and to sell it at whatever price the market will bear. Assume Kunal and Naj can pump as much water as they want without cost so that the marginal cost of water equals zero.
The weekly town demand schedule and total revenue schedule for water are shown in the table below.

-Refer to Table 17-5.Suppose the town enacts new antitrust laws that prohibit Kunal and Naj from operating as a monopolist.What will the new price of water be once the Nash equilibrium is reached?

• A) $3
• B) $4
• C) $5
• D) $6

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Definitions:

Sublimation

A defense mechanism proposed by Freud in which socially unacceptable impulses or idealizations are transformed into socially acceptable actions or behavior.

Displacement

A defense mechanism in psychoanalysis where emotional impulses are redirected from the original object to a more acceptable or less threatening object.

Defence Mechanism

Psychological strategies used unconsciously to protect oneself from anxiety or internal conflicts.

Rationalization

The cognitive process in which individuals justify behaviors or decisions that may otherwise be unacceptable, often by creating a seemingly logical reason for them.