Suppose you are an analyst for the Coca-Cola Company. An individual's inverse demand for Coca-Cola is estimated to be P = 98 ? 4Q (in cents). If Coca-Cola is produced according to the cost function C(Q) = 1,000 + 2Q (in cents), compute the surplus consumers receive when Coca-Cola charges the optimal block price.
A. $0
B. $11.52
C. $576
D. $1,152
Answer: A
You might also like to view...
Refer to Figure 7-4. With insurance and a third-party payer system, what price do doctors receive for medical services?
A) $25 B) $40 C) $55 D) >$55
If supply decreases and demand increases
A) the market clearing price definitely rises, and the equilibrium quantity falls. B) the market clearing price definitely rises, and the equilibrium quantity is indeterminate. C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate. D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls.
Assuming that charitable giving is a normal good, the income effect of a decrease in personal tax rates would lead to
A. more giving because households would have more disposable income. B. more giving because giving to charity would become less expensive relative to other goods. C. less giving because giving to charity would become more expensive relative to other goods. D. less giving because households would spend that money on luxury goods.
The transactions demand for money is related to money functioning as a
A) unit of accounting. B) store of value. C) medium of deferred payment. D) medium of exchange.