Suppose the inverse market demand is given by P = 75 ? 0.5Q. If the incumbent continues to produce 20 units of output, which of the following equations best summarizes the potential entrant's residual demand curve?

A. P = 65 ? 0.5Q
B. P = 20 ? 0.5Q
C. P = 65 ? 2Q
D. P = 150 ? 2Q


Answer: A

Economics

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Economics