Table 17-3 Imagine a Small Town in a Remote Area Where Only

question 115

Multiple Choice

Table 17-3
Imagine a small town in a remote area where only two residents, Maria and Miguel, own dairies that produce milk that is safe to drink. Each week Maria and Miguel work together to decide how many gallons of milk to produce. They bring milk to town and sell it at whatever price the market will bear. To keep things simple, suppose that Maria and Miguel can produce as much milk as they want without cost so that the marginal cost is zero. The weekly town demand schedule and total revenue schedule for milk is shown in the table below:
-Refer to Table 17-3. If this market for milk were perfectly competitive instead of monopolistic, what would be the price for milk?

• A)$0
• B)$10
• C)$12
• D)$16

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Definitions:

Avalanche

In finance, an avalanche method refers to a strategy of paying off debts by starting with the highest interest rate debt first.

Security Interest

A legal claim or lien on collateral that has been pledged, typically to obtain a loan, ensuring the right to take possession if repayment is not made.

Assigns

In legal terms, refers to the transfer of a property right or title to another person.

Subordinated

A classification of debt that ranks below other debts with regard to claims on assets or earnings.