There are two gas stations in a small isolated town. The market demand for gasoline is given by P=8-0.25-Q, where Q is the quantity of gas in thousands of gallons and Pis the price of gas in dollars per gallon. Each station can supply any quantity of gasoline at a constant marginal cost of $1 per gallon. There are no fixed costs. Both stations sell the same regular gas, and the differences in location, service, etc. don't matter to consumers.

There are two gas stations in a small isolated town. The market demand for gasoline is given by P=8-0.25-Q, where Q is the quantity of gas in thousands of gallons and Pis the price of gas in dollars per gallon. Each station can supply any quantity of gasoline at a constant marginal cost of $1 per gallon. There are no fixed costs. Both stations sell the same regular gas, and the differences in location, service, etc. don't matter to consumers.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Distinguish between technical efficiency and economic efficiency