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-(Table: Demand Schedule of Gadgets)Use Table: Demand Schedule of Gadgets.The market for gadgets consists of two producers,Margaret and Ray.Each firm can produce gadgets with no marginal cost or fixed cost.If industry output is 350 gadgets produced by Margaret and 250 gadgets produced by Ray and if Ray decides to increase output by an additional 100 gadgets,industry price will be:
A)$3.
B)$2.
C)$1.
D)$0.

Question

Use the following to answer question: 
-(Table: Demand Schedule of Gadgets)Use Table: Demand Schedule of Gadgets.The market for gadgets consists of two producers,Margaret and Ray.Each firm can produce gadgets with no marginal cost or fixed cost.If industry output is 350 gadgets produced by Margaret and 250 gadgets produced by Ray and if Ray decides to increase output by an additional 100 gadgets,industry price will be:
A)$3. 
B)$2. 
C)$1. 
D)$0.

Quizplus · Accepted Answer

According to the demand schedule, at an industry output of 600 gadgets, the market price will be $3. If Ray increases output by 100 gadgets, industry output will be 700 gadgets, which is still within the range where the market price is $3. Therefore, the industry price will still be $3.

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