Table 17-9
Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost.

-Refer to Table 17-9.If this market were perfectly competitive instead of oligopolistic,what would the price be?
A) $15
B) $10
C) $5
D) $0

Question

Table 17-9
Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost.
 
-Refer to Table 17-9.If this market were perfectly competitive instead of oligopolistic,what would the price be?
A) $15 
B) $10 
C) $5 
D) $0

Quizplus · Accepted Answer

In a perfectly competitive market, firms take the market price as given and produce where marginal cost equals market price. Since both firms have the same constant marginal cost of $10, the market price would also be $10, as this is the price where the quantity demanded equals the quantity supplied (40 units).

Table 17-9 Only Two Firms, Acme and Pinnacle, Sell a Particular Product