Suppose That the Demand in a Particular Industry Is Given

question 10

Multiple Choice

Suppose that the demand in a particular industry is given by Q^d = 100 - 2P.When the market price in the industry is $10 per unit, total demand in the industry is ____.Furthermore, assume that each of the four largest firms in the industry sell 15 units.Based on this information, the 4-firm concentration ratio is

• A)demand is 80 units and the 4-firm concentration ratio is 1.00.
• B)demand is 45 units and the 4-firm concentration ratio is 0.75.
• C)demand is 80 units and the 4-firm concentration ratio is 0.75.
• D)demand is 45 units and the 4-firm concentration ratio is 0.25.

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Definitions:

Marginal Cost

The increase in cost that results from producing one additional unit of a good or service.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance, providing a base cost for operating a business.

Total Cost

The sum of all funds utilized in the production of goods or services, including both fixed and variable costs.

Marginal Cost

The rise in overall manufacturing expenses resulting from the creation of an extra unit.