Consider the Demand and Supply Schedules Above for a Limited

question 12

Multiple Choice

Consider the demand and supply schedules above for a limited number of hotels in the downtown business district area of a particular city.
-Refer to the above information to answer this question.What are the equilibrium values of price and quantity?

• A)$10 million and 6.
• B)$30 million and 6.
• C)$50 million and 6.
• D)$60 million and 6
• E)$80 million and 6.

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Definitions:

Profit Maximizing

The process by which a company determines the price and output level that generates the maximum profit.

Marginal Cost

The supplementary expense incurred from manufacturing one more unit of a good or service.

Price

The amount of money expected, required, or given in payment for something.

Price Rigidity

Characteristic of oligopolistic markets by which firms are reluctant to change prices even if costs or demands change.