Refer to the above figure. The equilibrium price and quantity are
A) $2 and 12 units.
B) $6 and 9 units.
C) $8 and 6 units.
D) $10 and 1 unit.
B
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If information is asymmetric, explain why the hire contract is not efficient in production and a moral hazard exists, but the fixed fee to the principal contract is efficient and does not pose a moral hazard problem
What will be an ideal response?
Why do many firms base incentive pay on group performance?
What will be an ideal response?
At low levels of production, the firm
a. benefits from increased size because it can take advantage of greater specialization. b. has the potential for economies of scale. c. is unlikely to experiences acute problems with coordination. d. All of the above are correct.
During a time of inflation the nominal rate of interest will be
A. higher than the real rate. B. the same as the real rate. C. lower than the real rate. D. negative.