Scenario 12.2:
Suppose a stream is discovered whose water has remarkable healing powers. You decide to bottle the liquid and sell it. The market demand curve is linear and is given as follows:
P = 30 - Q
The marginal cost to produce this new drink is $3.
-Refer to Scenario 12.2. What price would this new drink sell for if it sold in a competitive market?
A) 0
B) $3
C) $13.50
D) $16.50
E) $27

Question

Quizplus · Accepted Answer

In a competitive market, the price of the product would equal the marginal cost of production, which is $3.

Scenario 12.2: Suppose a Stream Is Discovered Whose Water Has Remarkable Healing