Figure 15-12

Figure 15-12 shows the cost and demand curves for a monopolist.
-Refer to Figure 15-12.If this industry was organized as a perfectly competitive industry, the market output and market price would be
A)output = 62; price = $24.
B)output = 83; price = $22.
C)output = 62; price = $18.
D)output = 104; price = $20.80.

Question

Figure 15-12
  
Figure 15-12 shows the cost and demand curves for a monopolist.
-Refer to Figure 15-12.If this industry was organized as a perfectly competitive industry, the market output and market price would be
A)output = 62; price = $24. 
B)output = 83; price = $22. 
C)output = 62; price = $18. 
D)output = 104; price = $20.80.

Quizplus · Accepted Answer

In a perfectly competitive industry, the price is determined by the market demand and market supply where the market output is the sum of all individual firm's output. In this case, the market demand curve intersects the marginal cost curve at a quantity of 83 units and a price of $22. Therefore, the correct answer is B.

Figure 15-12 Figure 15-12 Shows the Cost and Demand Curves for a and Demand