The following figure shows the market demand curve for penieiline amment grants

Question

The following figure shows the market demand curve for penieiline amment grants excelusive R market was supplied by perfectly competitive firms. Later, the produce and sell penicillin to one firm. also shows government grants exclusive rights to constant at $3, irrespective of the inonce it begins to operThe figure also shows the marginal revenue curve (MR) of the market structure. Price/Cost Demand MR S 10 1S 20 25 30 as 40 45 S0 SS 60 65 70 75 80 8Ss Quantity (units) 33) Refer to the figure above. What is the quantity supplied in the market when the market is perfectly competitive? A) 30 units B) 45 units C) 60 units D) 90 units 34) Refer to the figure above. What A) SO B) $3 C) $6 D) s9 is the price that a perfectly competitive firm would charge? 35) Refer to the figure above. What is the consumer surplus when the market is perfectly com A) $30 B) $60 C) $90 D) $180

Explanation / Answer

33) The answer is C -) 60 units.

because perfectly comeptitive firm produce the output where price equal to marginal cost.

34) THe asnwer is $3.

35) D- ) $180 .

CS = 1/2 * 9-3) * 60 = 180

36) A- ) $0. ( because market is efficiently producing)

37) C-) $6 .

because monopoly charges the price where MR=MC

38) B -) $45

39) D-) The consumer surplus decrease by $135.

40)

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