Suppose That King Kanuta from Problem 11 Demands That Each

Suppose that King Kanuta from Problem 11 demands that each of his subjects give him 4 coconuts for every coconut that they consume. The king puts all of the coconuts that he collects in a large pile and burns them. The supply of coconuts is given by S(p_s) = 100p_s, where p_s is the price received by suppliers. The demand for coconuts by the king's subjects is given by D(p_d) = 2,080 - 100p_d, where p_d is the price paid by consumers. In equilibrium, the price received by suppliers will be

A) $4.
B) $10.40.
C) $52.
D) $6.
E) None of the above.

Correct Answer:

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