Consider the following model for the production of refined oil: MSC = 10 + 0.5Q; MEC = 0.3Q;
MSB = 30 - 0.3Q; MEB = 0. Use these relationships to answer any or all of Questions.
-Based on the model, the competitive price level is

Question

Quizplus · Accepted Answer

The competitive price level is determined where MSC = MSB. Setting 10 + 0.5Q = 30 - 0.3Q and solving for Q gives Q = 25. Substituting Q = 25 into either MSC or MSB gives P_C = $18.

Consider the Following Model for the Production of Refined Oil