The Figure Given Below Represents Two Monopolists James and Jerry

question 6

Multiple Choice

The figure given below represents two monopolists James and Jerry.James produces Good A using the input Good B which is produced by Jerry and has no other variable costs.James is the only consumer of Good B, and the marginal cost incurred by Jerry to produce Good B is zero.DA and DB represent the demand curves for Good A and Good B respectively.MRA and MRB represent the marginal revenue received from Good A and Good B respectively.It takes one unit of A to produce a unit of B.


-Refer to Figure.Which of the following agreements between James and Jerry would be feasible?

• A)James pays Jerry an amount above $48 only if Jerry agrees to produce 8 units.
• B)James pays Jerry and amount below $24 only if Jerry agrees to produce 8 units.
• C)James pays Jerry an amount above $24 only if Jerry agrees to produce 8 units.
• D)James pays Jerry an amount below $12 only if Jerry agrees to produce 8 units.

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Definitions:

Decimal Places

The number of digits to the right of the decimal point in a decimal number.

Logarithmic Equation

An equation involving logarithms, which represents the exponent to which the base of the logarithm must be raised to yield a given number.

Decimal Places

The positions to the right of the decimal point in a number, indicating fractions of ten.

Equation

A mathematical statement that asserts the equality of two expressions, usually involving variables and constants.