Suppose That in Problem 2, the Demand Curve for Mineral

question 19

Multiple Choice

Suppose that in Problem 2, the demand curve for mineral water is given by p = 60 - 8q, 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) $30.
• B) $45.
• C) $3.75.
• D) $7.50.
• E) $15.

---

Definitions:

Therapeutic Range

The concentration range of a drug within the blood that is considered effective and safe.

Diphenhydramine

An antihistamine drug used to relieve allergic reactions, treat insomnia, and alleviate symptoms of the common cold.

Side Effect

An unintended and usually adverse effect of a drug or therapy that occurs in addition to the desired therapeutic effect.

Demerol

A brand name for meperidine, a narcotic analgesic used to treat moderate to severe pain.