If a Monopoly Firm Sells to Competitive Distributors and the Distributors

question 56

Multiple Choice

If a monopoly firm sells to competitive distributors and the distributors have a constant marginal cost of $4 and they are charging the profit- maximizing retail price of $12, what is wholesale price of the product?

• A)$8
• B)$16
• C)$12
• D)$4

---

Definitions:

Directions

Instructions or guidance on how to reach a destination, perform a task, or operate something.

Bid

An offer of a specific price for goods or services, especially in the context of auctions or competitive tenders.

Pc

Often synonymous with Personal Computer, a general-purpose electronic computing device designed for individual use.

Solution

A mixture in which all the components are evenly distributed at the molecular level, or a way to solve a problem.