In a Competitive Market,the Demand and Supply Curves Are Q

question 105

Multiple Choice

In a competitive market,the demand and supply curves are Q = 12 - P and Q = 5P,respectively.If output is fixed at Q = 11,what is the amount of the resulting deadweight loss?

• A) 0
• B) 0.6
• C) 11.4
• D) 15

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power.

Buyers

Individuals or entities that exchange money for goods or services.

Perfect Competitor

A market structure where numerous small firms compete against each other, and products are homogenous, with no single firm able to influence the market price.

Monopolistic Competitor

A firm in a market structure where many companies sell products that are similar but not perfect substitutes, leading to some degree of market power.