A typical consumer consumes products X and Y.In competitive equilibrium,the price of X is three times the price of Y.If MC_X is the marginal cost of producing X and MC_Y is the marginal cost of producing Y,this implies that: A)MC_X = MC_Y + 3 B)MC_X + 3 = MC_Y. C)MC_X = (1/3)MC_Y. D)MC_X = 3MC_Y.

Question

Quizplus · Accepted Answer

In competitive equilibrium, the price of a product is equal to its marginal cost. Since the price of X is three times the price of Y, the marginal cost of producing X (MC_X) is also three times the marginal cost of producing Y (MC_Y).

A Typical Consumer Consumes Products X and Y