The Inverse Demand for Designer Blankets Is Given by P

question 32

Multiple Choice

The inverse demand for designer blankets is given by P = 40 - 0.01Q, where P is the price per blanket and Q is the total number of blankets brought to market. Two shops in the market supply specialty blankets. Shop 1's cost function is given by C₁ = 0.02q₁², where q₁ is the number it brings to market. Shop 2's cost function is given by C₂ = 0.02q₂², where q₂ is the number it brings to market. Given that the two shops compete by setting output (Cournot) , the equilibrium market price is $____.

• A) 32.65
• B) 30.76
• C) 28.58
• D) 23.43

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Definitions:

Stability of Causation

A principle suggesting that causal relationships remain consistent across different contexts and times.

Fixed Versus Incremental Attribution

Theories that explain how people perceive their ability to change (incremental) versus viewing their abilities as static (fixed).

Stable Internal

Characteristics or attributes within an individual that are consistent and reliable over time.

Stable External

Refers to external conditions or factors that remain consistent and unchanging over time, affecting individuals or environments in a predictable manner.