Suppose the Market Demand for Milk Is Q^d = 150

question 8

Multiple Choice

Suppose the market demand for milk is Q^d = 150 - 5P.Additionally,suppose that a dairy's variable costs are VC = 2Q² (where Q is the number of gallons of milk produced each day) ,its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day.In the long run there is free entry into the market.Suppose the demand for milk doubles.If in the short run the number of firms is fixed and their fixed costs are sunk,the short run market supply function is:

• A) Q^s = 40P if price is greater than $20.
• B) Q^s = P/4 if price is greater than $20.
• C) Q^s = 2.5P if price is greater than $20.
• D) Q^s = 300 - 10P for all prices.

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Definitions:

Households

Entities consisting of one or more people living together who make joint decisions about consumption and finances.

Marginal Revenue

The additional income earned from selling one more unit of a good or service, crucial for decision-making in production levels.

Surround Sound Systems

Audio systems designed to immerse the listener in sound by using multiple speakers placed around the room to create a three-dimensional sound experience.

Total Revenue

The overall amount of money generated by a business from its sales activities before any costs or expenses are deducted.