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

question 242

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. Suppose the town enacts new antitrust laws that prohibit Maria and Miguel from operating as a monopoly. How much profit will Miguel and Maria each earn once they reach a Nash equilibrium?

• A)$40
• B)$36
• C)$32
• D)$30

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Definitions:

Research Studies

Systematic investigations intended to establish facts, gather new data, or reach new conclusions through experimental, observational, or theoretical means.

Operant Theorist

A researcher or scholar who studies or advocates for the theory of operant conditioning, focusing on how behavior is influenced by its consequences.

Defence Mechanisms

Subconscious defense mechanisms used by individuals or groups to manage real-life situations and uphold their self-esteem.

Skinner

A psychologist best known for his work in behaviorism and the development of operant conditioning.