The Inverse Demand for Tacos Is Given by P =

question 94

Multiple Choice

The inverse demand for tacos is given by P = 10 - 0.02Q, where P is the price per taco and Q is the total number of tacos brought to market. There are two taco shops in the local market. Shop 1's cost function is given by C₁ = 0.01q₁², where q₁ is the number of tacos it brings to market. Shop 2's cost function is given by C₂ = 0.01q₂², where q₂ is the number of tacos it brings to market. Assume the two shops compete by setting output (Cournot) . Let Q = q₁ + q₂. Shop 1 produces ____ to maximize profit.

• A) 250
• B) 200
• C) 150
• D) 125

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Definitions:

Special Receptors

Cells or groups of cells in the body that detect changes in the environment (external or internal) and signal these changes to the nervous system.

Taste Buds

Sensory organs located on the tongue and other parts of the mouth, which are responsible for tasting and perceiving different flavors.

Cochlea

A spiral-shaped, fluid-filled structure in the inner ear that plays a key role in the process of hearing by converting sound vibrations into neural signals.

Olfactory Bulb

The olfactory bulb is a brain structure responsible for processing smells, located at the base of the brain and connected to the nasal cavity.