Suppose That in Problem 2, the Demand Curve for Mineral

question 8

Multiple Choice

Suppose that in Problem 2, the demand curve for mineral water is given by p = 20 - 16q, 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 monopolist producer who is able to produce mineral water at zero cost. The producer charges the distributor a price of c per bottle, that will maximize the producer's total revenue. Given his marginal cost of c, the distributor chooses an output to maximize profits. The price paid by consumers under this arrangement is

• A) $10.
• B) $15.
• C) $1.25.
• D) $.63.
• E) $5.

---

Definitions:

Cash Budget

A forecast of cash inflows and outflows over a specific period, used to estimate a company's short-term liquidity needs.

Cash Balance

Cash balance refers to the amount of cash that a company or an individual has available at any given time.

Cash Payments

Cash payments refer to transactions where cash is used to settle the payment for goods, services, or obligations.

Cash Budget

An estimation of cash inflows and outflows for a business over a specific period, used for managing liquidity.