If P = Q/15 Represents Marginal Cost for a Monopolist

question 174

Multiple Choice

If P = Q/15 represents marginal cost for a monopolist and market supply for a competitive industry and market demand is given by Q_d = 500 - 10P, the difference between the monopoly equilibrium and the competitive equilibrium is that a monopolist would produce:

• A) 187.5 units of output at a price of $31.25 each, whereas competitive output would be 300 units at a price of $20.
• B) 300 units of output at a price of $20, whereas competitive output would be 187.5 units at a price of $31.25.
• C) 250 units of output at a price of $25, whereas competitive output would be 300 units at a price of $20.
• D) 187.5 units of output at a price of $31.25, whereas competitive output would be 250 units at a price of $25.

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