Scenario $12\mathrm{.}1$:

Suppose mountain spring water can be produced at no cost and that the demand and marginal revenue curves for mountain spring water are given as follows:

$Q=6000-5P,MR=1200-0\mathrm{.}4Q$

Refer to Scenario $12\mathrm{.}1.$ What is the profit maximizing price of a monopolist?

A$)$ $$400$

B$)$ $$600$

$MR=0$

C$)$ $$800$

$1200-0\mathrm{.}4Q=0$

D$)$ $$900$

E$)$ none of the above

Answer: B

Diff: $2$

Section: $12\mathrm{.}2$

Refer to Scenario $12\mathrm{.}1.$ What will be the price in the long run if the industry is a Cournot duopoly?

A$)$ $$400$

B$)$ $$600$

C$)$ $$800$

D$)$ $$900$

E$)$ Competition will drive the price to zero.