Suppose Marginal Cost Is Constant and Equal to 100 and Market

question 76

Multiple Choice

Suppose marginal cost is constant and equal to 100 and market demand is given by Q_d = 20- 1/10P. A profit-maximizing monopolist will set price equal to:

• A) 10.
• B) 100.
• C) 150.
• D) 300.

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Definitions:

Common Stock

A type of ownership in a corporation, typically with voting rights and participation in dividends.

Retained Earnings

The portion of a company's profits that is kept or retained rather than distributed to shareholders or used for investment.

Other Revenues and Gains

Accounts that record income from activities that are not part of a business's core operations.

Unrealized Gain

The potential profit on an investment that has not been sold, reflecting an increase in value on paper but not realized as cash.