The Price Elasticity of Demand for Melocotones Is Constant and Equal

question 16

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 $675 per ton and produces 50% of the total number of melocotones sold.The equilibrium price of a ton of melocotones must be

• A)$1,800.
• B)$450.
• C)$900.
• D)$675.
• E)$1,350.