The figure below shows the demand (D, MR) and cost (MC, ATC) curves for six oligopolies in the chewing gum industry. Assume that all 6 firms have the same identical cost curves. Demand and cost conditions for the Chewing Gum Industry $4 .40 .35 .31 8.30 .25 Dollars MC MR ATC D 0 12 14 16 Packs of chewing gum in thousands Suppose you're hired by the Department of Justice Anti-Trust Division to analyze the chewing gum industry. You conclude that if the industry were perfectly competitive, the short-run equilibrium output and price would be: a. 14,000 packs of chewing gum at a price of $0.30 per pack b. 16,000 packs of chewing gum at a price of $0.35 per pack indeterminate output levels from this information. c. d. 12,000 packs of chewing gum at a price of $0.40 per pack

The figure below shows the demand (D, MR) and cost (MC, ATC) curves for six oligopolies in the chewing gum industry. Assume that all 6 firms have the same identical cost curves. Demand and cost conditions for the Chewing Gum Industry $4 .40 .35 .31 8.30 .25 Dollars MC MR ATC D 0 12 14 16 Packs of chewing gum in thousands Suppose you're hired by the Department of Justice Anti-Trust Division to analyze the chewing gum industry. You conclude that if the industry were perfectly competitive, the short-run equilibrium output and price would be: a. 14,000 packs of chewing gum at a price of $0.30 per pack b. 16,000 packs of chewing gum at a price of $0.35 per pack indeterminate output levels from this information. c. d. 12,000 packs of chewing gum at a price of $0.40 per pack

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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