Gotcha, the Only Seller of Stun Guns, Faces the Inverse

question 55

Multiple Choice

Gotcha, the only seller of stun guns, faces the inverse market demand curve P = 400 - 12Q, where Q measures the number of stun guns per day and P is the price per stun gun. The marginal cost is constant at $64. Suppose a new firm, Ouchy, enters the stun gun market. Ouchy's marginal cost is also constant at $64. Gotcha and Ouchy agree to form a cartel and evenly split the market output. Gotcha holds to the agreement, but Ouchy decides to produce 5 more stun guns than its level under the cartel agreement. In this case, the market price is $ ____.

• A) 232
• B) 205
• C) 192
• D) 172

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Definitions:

Family-friendly

Policies or practices that are considerate of and supportive towards employees' family commitments, enabling better work-life balance.

Alienating

Creating a feeling of estrangement or detachment among individuals or within a group, often leading to a sense of isolation or disconnection.

Older Workers

Employees who are near or beyond the traditional retirement age, often bringing valuable experience and stability to the workforce.

Family-friendly Benefits

Benefits offered by employers that support the balance between work and family life, such as flexible working hours, parental leave, and childcare support.