The Market Inverse Demand Curve for Thrust Bearings Is P

question 132

Multiple Choice

The market inverse demand curve for thrust bearings is P = 15 - 1.5Q, where Q is measured in hundreds of bearings per day and P is the price per bearing. The marginal cost is $3. Suppose two firms, which are Bertrand competitors, produce identical thrust bearings for this market. If this market were a perfectly competitive market, the market price would be $____.

• A) 9
• B) 7
• C) 5
• D) 3

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Definitions:

Price Elasticity

An index representing how the demand or supply of an item responds to price fluctuations.

Time Consumers

Activities or processes that require a significant amount of an individual's or organization's time.

Tax Revenue

The income that is gained by governments through taxation.

Demand Elastic

The responsiveness of demand for a good or service to changes in its price, income levels, or substitute and complementary products' prices.