A Firm Faces the Demand for Its Product, , as Shown

question 10

Multiple Choice

A firm faces the demand for its product, , as shown in the figure below. It produces under conditions of constant costs in the long run, and LMC = LAC = $12 per unit. Answer Questions .
-the firm can practice first-degree price discrimination, it will be able to collect $________ in total revenue under perfect price discrimination.

• A) $1,872
• B) $1,936
• C) $7,744
• D) $9,856
• E) none of the above

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Definitions:

Demand Function

A mathematical representation showing the relationship between the quantity demanded of a good and its price, along with other factors like income and prices of related goods.

Supply Function

A mathematical representation that shows the relationship between the quantity of a good supplied and its price.

Subsidy

A subsidy is a financial contribution provided by government or another authority to support businesses, markets, or individuals, aiming to promote economic and social policies.

Inverse Demand Function

A mathematical relationship expressing the price of a good or service as a function of the quantity demanded, implying how prices vary with changes in quantity demanded.