Suppose That the Demand Curve for Mineral Water Is Given

question 4

Multiple Choice

Suppose that the demand curve for mineral water is given by p = 70 - 12q, where p is the price per bottle paid by consumers and q is the number of bottles purchased by consumers. Mineral water is supplied to consumers by a monopolistic distributor who buys from a monopolistic producer, who is able to produce mineral water at zero cost. The producer charges the distributor a price of c per bottle. Given his marginal cost of c per unit, the distributor chooses an output to maximize his own profits. Knowing that this is what the distributor will do, the producer sets his price c so as to maximize his revenue. The price paid by consumers under this arrangement is

• A) $17.50.
• B) $35.
• C) $5.83.
• D) $52.50.
• E) $2.92

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Definitions:

Alcohol-Use Disorder

A health disorder marked by the inability to cease or regulate drinking despite negative impacts on social, work, or physical well-being.

Disulfiram

A medication used to support the treatment of chronic alcoholism by producing an acute sensitivity to ethanol (drinking alcohol).

Recovering Alcoholic

An individual who has previously struggled with alcohol addiction but is currently abstaining from alcohol to manage their addiction and improve their health.

Substance-Use Disorders

A complex condition where there is uncontrolled use of a substance despite harmful consequence.