The Inverse Demand for Tacos Is Given by P =

question 166

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. In this case, Shop 2 will earn $____ in profit.

• A) 470.35
• B) 468.75
• C) 234.25
• D) 224.75

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Definitions:

Contemplation

A phase of reflection or deep thought, often preceding a decision or action.

Contemplation Stage

The period in which an individual is aware a change is needed and is actively considering making that change but has not yet committed to taking action.

Tangible Assistance

Physical or concrete help provided to individuals or groups, such as resources or material aid.

Extrinsic Motivation

Motivation that involves external incentives such as rewards and punishments.