Consider the following model for the production of refined oil: MSC = 10 + 0.5Q; MEC = 0.3Q;
MSB = 30 - 0.3Q; MEB = 0. Use these relationships to answer any or all of Questions.
-According to these relationships, the competitive output level arises where

Question

Quizplus · Accepted Answer

The competitive output level occurs where MSC = MEC, and since MSC = 10 + 0.5Q and MEC = 0.3Q, we have: 10 + 0.5Q = 0.3Q 0.2Q = 10 Q = 50 Substituting Q = 50 into MSB = MEB gives: 30 - 0.3(50) = 15 Thus, the competitive output level is Q = 50, which is achieved when Q_C = 40 (20 + 15 + 5). Therefore, the answer is C.

Consider the Following Model for the Production of Refined Oil