Table 17-3 Imagine a Small Town in a Remote Area Where Only

question 403

Multiple Choice

Table 17-3
Imagine a small town in a remote area where only two residents, Maria and Miguel, own dairies that produce milk that is safe to drink. Each week Maria and Miguel work together to decide how many gallons of milk to produce. They bring milk to town and sell it at whatever price the market will bear. To keep things simple, suppose that Maria and Miguel can produce as much milk as they want without cost so that the marginal cost is zero. The weekly town demand schedule and total revenue schedule for milk is shown in the table below:
-Refer to Table 17-3. Suppose that Maria and Miguel work together in order to operate as a profit-maximizing monopolist. What price will they charge for milk?

• A)$14
• B)$12
• C)$10
• D)$8

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Definitions:

Psychological Harm

Damage to an individual’s mental state, which can impair emotional wellbeing and functionality, often resulting from traumatic experiences or stress.

Economic Systems

Economic systems are the means by which countries and governments distribute resources and trade goods and services, including capitalism, socialism, and mixed economies.

Gini Index

A statistical measure of income inequality within a population, ranging from 0 (perfect equality) to 1 (perfect inequality).

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An ideal state where all individuals have exactly the same status, rights, and opportunities without any discrimination.