Suppose the Demand Curve for Mineral Water Is Given by P

question 4

Multiple Choice

Suppose the demand curve for mineral water is given by p = 70 - 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)$52.50.
• B)$35.
• C)$4.38.
• D)$2.19.
• E)$17.50.

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Definitions:

Flow Of Costs

The way costs move through inventory accounts, eventually ending up as cost of goods sold on the income statement.

Accumulating Manufacturing Costs

The process of tracking and collecting all the costs associated with the production of goods, from raw materials to labor.

Raw Materials Inventory

The stock of unprocessed materials used in the production of goods.

Invoice Costs

Invoice costs refer to the total amount billed to a customer for goods or services purchased, including the cost of the products, shipping, and any other charges.