Refer to Figure 7-5. The efficient quantity of medical services is

Suppose duopolists face the market inverse demand curve P = 100 - Q, Q = q1 + q2, and both firms have a constant marginal cost of 10 and no fixed costs. If firm 1 is a Stackelberg leader and firm 2's best response function is q2 = (100 - q1)/2, at the Nash-Stackelberg equilibrium firm 1's profit is

A) 400. B) 650. C) 800. D) 1200.

Under a perfectly competitive price system:

a. an equitable allocation of the available resources will always result. b. there is no opportunity for individuals to trade amongst themselves. c. there is no reason to expect that voluntary trading will result in an equitable allocation of the available resources. d. none of the above.