Suppose That King Kanuta from Problem 11 Demands That Each

question 15

Multiple Choice

Suppose that King Kanuta from Problem 11 demands that each of his subjects give him 4 coconuts for every coconut that they consume. The king puts all of the coconuts that he collects in a large pile and burns them. The supply of coconuts is given by S(p_s) = 100p_s, where p_s is the price received by suppliers. The demand for coconuts by the king's subjects is given by D(p_d) = 10,400 - 100p_d, where p_d is the price paid by consumers. In equilibrium, the price received by suppliers will be

• A) $20.
• B) $52.
• C) $30.
• D) $260.
• E) None of the above.

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Definitions:

Complete

Refers to a state where all necessary parts are present or when a process has been finished entirely, leaving nothing omitted.

Reflexive

A property of binary relations where every element is related to itself; often discussed in mathematics and logic.

Transitive

A property in logic and mathematics where if relation A relates to B and B relates to C, then A must relate to C.

Utility Function

A utility function is an economic model that relates the satisfaction or utility a consumer derives from consuming specific quantities of goods and services.