Asked by Matthew Pereira on Jun 23, 2024
Verified
Refer to Table 17-1. If the market for water were perfectly competitive instead of monopolistic, how many gallons of water would be produced and sold?
A) 0 gallons
B) 540 gallons
C) 630 gallons
D) 1,080 gallons
Perfectly Competitive
A market structure where many firms sell identical products, entry and exit are easy, and no single seller can influence the market price.
Marginal Cost
The increase in total cost that arises from producing one additional unit of a good or service.
Total Revenue
The total amount of income generated by the sale of goods or services before any expenses are subtracted.
- Understand the concept of the demand schedule and how it relates to product pricing.
- Assess the performance of production in different economic market frameworks, particularly in perfect competition and monopolistic cases.
Verified Answer
JC
Jordan CobbsJun 23, 2024
Final Answer :
D
Explanation :
In a perfectly competitive market, the price equals the marginal cost. Since the marginal cost of water is zero, the quantity produced and sold would be where the price reaches zero, which is at 1,080 gallons according to the table.
Learning Objectives
- Understand the concept of the demand schedule and how it relates to product pricing.
- Assess the performance of production in different economic market frameworks, particularly in perfect competition and monopolistic cases.