Quantity
(in gallons)
| |
Price
|
Total Revenue
(and total profit)
|
|
0
|
$10
|
$0
|
|
50
|
9
|
450
|
|
100
|
8
|
800
|
|
150
|
7
|
1,050
|
|
200
|
6
|
1,200
|
|
250
|
5
|
1,250
|
|
300
|
4
|
1,200
|
|
350
|
3
|
1,050
|
|
400
|
2
|
800
|
|
450
|
1
|
450
|
|
500
|
0
|
0
|
The table shows the town of Mauston's demand schedule for gasoline. For simplicity, assume the town's gasoline seller(s) incur no costs in selling gasoline.
25. If the market for gasoline in Mauston is perfectly competitive, then the equilibrium price of gasoline is
a. $7 and the equilibrium quantity is 150 gallons.
b. $5 and the equilibrium quantity is 250 gallons.
c. $3 and the equilibrium quantity is 350 gallons.
d. $0 and the equilibrium quantity is 500 gallons.
26. If the market for gasoline in Mauston is a monopoly, then the profit-maximizing monopolist will charge a price of
a. $7 and sell 150 gallons.
b. $5 and sell 250 gallons.
c. $3 and sell 350 gallons.
d. $0 and sell 500 gallons.
27. Refer to Table 17-4. If there are exactly two sellers of gasoline in Mauston and if they collude, then which of the following outcomes is most likely?
a. Each seller will sell 250 gallons and charge a price of $5.
b. Each seller will sell 175 gallons and charge a price of $3.
c. Each seller will sell 125 gallons and charge a price of $2.5.
d. Each seller will sell 125 gallons and charge a price of $5.
28. If there are exactly four sellers of gasoline in Mauston and if they collude, then which of the following outcomes is most likely?
a. Each seller will sell 62.5 gallons and charge a price of $1.25.
b. Each seller will sell 62.5 gallons and charge a price of $5.
c. Each seller will sell 100 gallons and charge a price of $2.
d. Each seller will sell 250 gallons and charge a price of $0.
29. Refer to Table 17-4. Suppose there are exactly two sellers of gasoline in Mauston: Shellon and Standstop. If Shellon sells 150 gallons and Standstop sells 200 gallons, then
a. Shellon's profit is $450 and Standstop's profit is $600.
b. Shellon's profit is $1,050 and Standstop's profit is $1,200.
c. the two firms are colluding and earn monopoly profits.
d. consumers in Mauston are worse off than they would be if the two firms colluded.
