Suppose the Demand Function in the Industry Is P =

question 42

Multiple Choice

Suppose the demand function in the industry is p = 100 - y and each firm has a constant marginal cost of $40. Suppose there is a monopoly firm and a potential entrant with a fixed cost of $100. The limit output is:

• A)40.
• B)35.
• C)30.
• D)25.

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Definitions:

Price Hike

A general increase in the cost of goods and services, often due to inflation or increased production costs.

Unit Sales

The total units of a product that a company sells in a particular period.

Traceable Fixed Expense

A fixed cost that can be directly linked to a specific cost object, such as a product, department, or project.

Unit Sales

The total quantity of units of a product sold in a specific period.