One Unit of Zinc and One Unit of Copper Are

question 17

Multiple Choice

One unit of zinc and one unit of copper are needed to produce a unit of brass. The world's supply of zinc and the world's supply of copper are owned by two different monopolists. For simplicity assume that it costs nothing to mine zinc and copper, that no other inputs are needed to produce brass, and that the brass industry operates competitively. Then the price of a unit of brass equals the cost of the inputs used to make it. The demand function for brass is q = 900 - 2p, where p is the price of brass. The zinc and copper monopolists each set a price, believing that the other monopolist will not change its price. What is the equilibrium price of brass?

• A) $100
• B) $200
• C) $300
• D) $50
• E) $25

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