In the market for cotton, suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons. If the government then imposes a price support of $20 per ton,
a. the government must supply some cotton to offset the shortage that results.
b. the marginal cost exceeds the marginal benefit.
c. the marginal benefit exceeds the marginal cost.
d. the market becomes more efficient
e. the marginal cost decreases.
In the market for cotton, suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons. If the government then imposes a price support of $20 per ton,
a. the government must supply some cotton to offset the shortage that results.
b. the marginal cost exceeds the marginal benefit.
c. the marginal benefit exceeds the marginal cost.
d. the market becomes more efficient
e. the marginal cost decreases.
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| 17. | Suppose that the demand for bentonite is given by Q = 40 Ć¢ĀĀ 0.5P, where Q is in tons of bentonite per day and P is the price per ton. Bentonite is produced by a monopolist at a constant marginal and average total cost of $10 per ton. How much profit is earned per day if the profit-maximizing quantity of bentonite is sold at the profit-maximizing price? | ||||||||
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Suppose that the demand for bentonite is given byĀ Q = 40-0.5P, whereĀ QĀ is in tons of bentonite per day andĀ PĀ is the price per ton. Bentonite is produced by a monopolist at a constant marginal and average total cost of $10 per ton. How much profit is earned per day if the profit-maximizing quantity of bentonite is sold at the profit-maximizing price?
