In Problem 4, Suppose That Each Firm Has the Cost

question 17

Multiple Choice

In Problem 4, suppose that each firm has the cost function c(y) = y² + 9 for y > 0 and c(0) = 0. With industry demand given by D(p) = 51 - p, the equilibrium price and equilibrium number of firms in the industry (in that order) will be

• A) $8 and 11.
• B) $3 and 18.
• C) $3 and 48.
• D) $6 and 15.
• E) $6 and 45.

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Definitions:

Authorization to Confess Judgment

A legal provision where a debtor gives a creditor the right to enter a judgment against them without trial if they fail to meet the terms of an agreement.

Negotiability

This term refers to the characteristic of a financial instrument that enables it to be transferred or assigned from one party to another with ease and legal effect.

I.O.U.

An informal document acknowledging a debt owed.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee’s name written on the document.