Drug dealers purchase a drug at a constant marginal cost of $40 per unit. The drug is then sold in perfect competition. Suppose that rival gangs seize 50% of the drugs and resell them at the prevailing market price. What would be the effect of these gangs on the equilibrium market price? It would go up by $80 It would go up by $40 It would stay the same It would go down by $20 It would go up by $20

Drug dealers purchase a drug at a constant marginal cost of $40 per unit. The drug is then sold in perfect competition. Suppose that rival gangs seize 50% of the drugs and resell them at the prevailing market price. What would be the effect of these gangs on the equilibrium market price? It would go up by $80 It would go up by $40 It would stay the same It would go down by $20 It would go up by $20

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.7P

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