A two-good economy is in a competitive equilibrium. The price of a pie
A two-good economy is in a competitive equilibrium. The price of a piece of candy is $2 and the price of a desk is $12. The marginal cost of candy is given by MCc = 2Qc and the marginal cost of a desk is MCd = 4 + 4Qd. The current production level of candy is one piece. What is the output of desks?
A) Qd = 1
B) Qd = 2
C) Qd = 4
D) Qd = 5
ANSWER
B
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