Table 16-2

Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 16-2. The average cost of production is constant at $2 per tube.
-Refer to Table 16-2.How many tubes of toothpaste will Neem sell in Middle Fall and at what price?
A)Q = 2 units; P = $7
B)Q = 3 units; P = $6
C)Q = 4 units; P = $5
D)Q = 5 units; P = $4

Question

Table 16-2
  
Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 16-2. The average cost of production is constant at $2 per tube.
-Refer to Table 16-2.How many tubes of toothpaste will Neem sell in Middle Fall and at what price?
A)Q = 2 units; P = $7 
B)Q = 3 units; P = $6 
C)Q = 4 units; P = $5 
D)Q = 5 units; P = $4

Quizplus · Accepted Answer

The correct answer is based on the equilibrium point where the quantity demanded equals the quantity supplied, which is 4 units at a price of $5.

Table 16-2 Neem Products Sells Its Ayurvedic Neem Toothpaste in Two Completely