The Demand Curve for the Output of a Certain Industry

question 52

Multiple Choice

The demand curve for the output of a certain industry is linear; q = A - Bp. There are constant marginal costs of C. For all values of A, B, and C such that A > 0, B > 0, and 0 < C < ,

• A) if the industry is monopolized, prices will be exactly twice as high as they would be if the industry were competitive.
• B) if the industry is competitive, output will be exactly twice as great as it would be if the industry were monopolized.
• C) if the industry is monopolized, prices will be more than twice as high as if the industry is competitive.
• D) if the industry is monopolized, output will be more than half as large as it would be if the industry were competitive.
• E) None of the above.

---

Definitions:

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices.

Sales

Transactions in which goods or services are exchanged for money.

Supply

The total amount of a specific good or service that is available to consumers, often influenced by price.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in market balance.