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Consider Figure 6

Question 26

Essay

Consider Figure 6.5 in your textbook.If the equation for the demand curve were P = 10 - Q and MC constant at 4,
(a)Find the competitive level of output and price.
(b)Find the marginal revenue and derive the rent seeking cartel's of output and price.
(c)How much rent is being raised?

Correct Answer:

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(a)Set Demand = Supply,10 - Q ...

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