Milky Moo and Mega Cow are the only sellers of milk.Milky Moo's supply function is Q^s_MMoo = 12P - 6 at prices above $0.50 and zero at prices below $0.50.Mega Cow's supply function is Q^s_MCow = 9P - 3 at prices above $0.33 and zero at prices below $0.33.At a price of $2.00,the market supply of milk is:

Question

Quizplus · Accepted Answer

At a price of $2.00, both Milky Moo and Mega Cow are supplying milk since the price is above their respective minimum prices. The market supply is the sum of both supplies: (12*2 - 6) + (9*2 - 3) = 24 - 6 + 18 - 3 = 33. This matches the formula 21P - 9 when P = 2.

Milky Moo and Mega Cow Are the Only Sellers of Milk.Milky