The Price Elasticity of Demand for Melocotones Is Constant and Equal

question 1

Multiple Choice

The price elasticity of demand for melocotones is constant and equal to -2.The melocotone market is controlled by two Cournot duopolists who have different cost functions.One of the duopolists has a constant marginal cost of $975 per ton and produces 70% of the total number of melocotones sold.The equilibrium price of a ton of melocotones must be

• A)$1,500.
• B)$750.
• C)$975.
• D)$3,000.
• E)$2,250.

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Definitions:

Income Inequality

The unequal allocation of financial resources among a community, resulting in disparities between affluent individuals and those in poverty.

Imperfectly Competitive Firms

Companies that operate in market settings where individual sellers have some control over the price of their products, contrary to perfect competition.

Property Resources

Assets owned by individuals or entities, including land, buildings, and intellectual property, that can be used to produce goods and services.

Purely Competitive Firm

A business that operates in a market where there are many buyers and sellers, none of which can control market prices.