If Tiger Toys Faces a Demand Curve of P =

question 39

Multiple Choice

If Tiger Toys faces a demand curve of P = 85 − 0.25Q and a MC = ATC = 20,then the market price would be

• A)$85.00.
• B)$52.50.
• C)$130.00.
• D)$32.50.

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Definitions:

Perfect Competitor

A theoretical market structure where many firms sell identical products, there are no barriers to entry or exit, buyers have perfect information, and firms are price takers.

Long Run

A period in economics where all factors of production and costs are variable, allowing for full industry adjustment to changes.

Perfect Competitor

A theoretical market structure where many firms offer a standardized product, there is free entry and exit, and all buyers and sellers have perfect information, leading to price being equal to marginal cost.

Long Run

A period in which all inputs can be adjusted, allowing firms to change their production capacity and industries to enter or exit markets.