There Are Only Two Firms in an Industry with Demand

question 125

Multiple Choice

There are only two firms in an industry with demand curves q₁ = 30 - P and q₂ = 30 - P.Both have no fixed costs and each has a marginal cost of 10 per unit produced.If they behave as profit-maximizing price takers,each produces 10 units and sells them at a price of 10 so that each firm makes zero economic profits.If they form a cartel,their inverse demand curve is

• A) Q = 30 - P.
• B) Q = 60 - 2P.
• C) P = 60 - 2Q.
• D) P = 30 - Q/2.

Identify and describe the role of automatic stabilizers in the economy.

Comprehend the perspectives of classical and Keynesian economists on the economy.

Analyze the impact of fiscal policy on economic stability.

Explain the concept of laissez-faire and its implications on economic policy.

---

Definitions:

Profit Margin

The amount by which revenue from sales exceeds costs in a business, expressed as a percentage.

Sales-Oriented

A business approach focused primarily on generating sales regardless of customer needs or the longer-term company interests.

Objective

A specific, measurable, attainable, relevant, and time-bound goal that an individual or organization aims to achieve.

Price Increases

Price increases refer to the action of raising the cost at which goods or services are sold, often in response to factors like inflation, increased production costs, or higher demand.