The Demand Curve for the Output of a Certain Industry

question 39

Multiple Choice

The demand curve for the output of a certain industry is linear; q = A - Bp.There are constant marginal costs of C.For all values of A, B, and C such that A > 0, B > 0, and 0 < C < A/B,

• A)if the industry is monopolized, prices will be exactly twice as high as they would be if the industry were competitive.
• B)if the industry is competitive, output will be exactly twice as great as it would be if the industry were monopolized.
• C)if the industry is monopolized, prices will be more than twice as high as if the industry is competitive.
• D)if the industry is monopolized, output will be more than half as large as it would be if the industry were competitive.
• E)None of the above.

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