Suppose the Market Demand Curve Is Given by Qᵈ =

question 27

Multiple Choice

Suppose the market demand curve is given by Qᵈ = 80 - 10P, and the market supply curve is given by Qˢ = 10 + 15P. What is the equilibrium price and quantity?

• A)P* = $2.60 and Q* = 54
• B)P* = $3.00 and Q* = 55
• C)P* = $2.80 and Q* = 52
• D)P* = $2.80 and Q* = 54

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Definitions:

Short-run Cost Function

The relationship between the cost of production and the level of output when at least one input is fixed in the short term.

Long-run Cost Function

A relationship that shows the lowest possible cost at which a firm can produce any given level of output when all inputs, including capital, are variable.

Cost-output Elasticity

A measure of how responsive the cost of production is to a change in the output level.

Marginal Cost

The added expense incurred upon producing one further unit of a good or service.