(Table: Demand for Solar Water Heaters) Look at the Table

question 54

Multiple Choice

(Table: Demand for Solar Water Heaters) Look at the table Demand for Solar Water Heaters.The marginal cost of producing solar water heaters is zero, and only two firms, Rheem and Calefi, produce them.If they agree to produce only 50 water heaters, with each firm producing only 25 and if Rheem cheats on the agreement and produces 30 water heaters, what is the price effect?

• A)-$1,000
• B)-$2,500
• C)$2,000
• D)$1,000

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Definitions:

APR

The Annual Percentage Rate, a measure used to calculate the cost of borrowing, including interest and other fees, shown as a yearly rate.

Payday Loan

A type of short-term borrowing where a lender provides high-interest credit based on a borrower's income and credit profile, typically to be repaid by the next payday.

Average Daily Balance

The average amount owed per day during a billing cycle.

Finance Charges

The cost of borrowing money on credit, including interest and other fees.