The Following Equations Represent the Demand and Supply for Kumquats

question 130

Multiple Choice

The following equations represent the demand and supply for kumquats. Q_D = 60 - 3P
Q_S = -20 + 5P
What is the equilibrium price (P) and quantity (Q - in thousands) of kumquats?

• A)P = $5; Q = 20 thousand
• B)P = $30; Q = 5 thousand
• C)P = $20; Q = 10 thousand
• D)P = $10; Q = 30 thousand

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Definitions:

Cournot Duopolists

Two firms in a market where each firm decides on its output level assuming the output of the other firm is fixed, leading to a stable competition equilibrium.

Equilibrium Prices

The market price at which the supply of an item equals the demand for that item, leading to a stable market condition where there is no surplus or shortage.

Stackelberg Model

Oligopoly model in which one firm sets its output before other firms do.

Dominant Strategy

In game theory, a strategy that is the best choice for a player, regardless of what the other players choose.