Consider a Profit-Maximizing Monopoly Pricing Under the Following Conditions

question 309

Multiple Choice

Consider a profit-maximizing monopoly pricing under the following conditions. The profit-maximizing quantity is 40 units, the profit-maximizing price is $160, and the marginal cost of the 40th unit is $120. If the good were produced in a perfectly competitive market, the equilibrium quantity would be 50, and the equilibrium price would be $150. The demand curve and marginal cost curves are linear. What is the value of the deadweight loss created by the monopolist?

• A)$40
• B)$100
• C)$200
• D)$400

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Definitions:

Eutectic Mixture

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