Barbara owns a truck stop on the prairies, miles from anywhere. Price and cost (

Question

Barbara owns a truck stop on the prairies, miles from anywhere. Price and cost (dollars per meal) The graph shows her marginal revenue and marginal cost curves and the demand curve she faces How many fower meals does Barbara serve than she would if the market were perfectly competitive? Barbara serves 1.5 fewer meals a woek than she would if the market were perfectly competitive 60 80 100 120 140 160 Quantty (meals per week) r 1 í :/ i : 1. I cu) ! Mom Enter your answer in the answer box. 01/15/18 11:58pm ASSESS Chapter 20 Quiz 8 8 0

Explanation / Answer

under the monopoly equilibrium, MR = MC.

Thus, output under monopoly equilibrium = 60 meals per week.

And, under competitive equilibrium, P = MC.

Thus, output under competitive equilibrium = 120 meals per week.

Hence, Barbara serves 60 fewer meals per week then she would if the market were perfectly competitive.

Thanks!

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