The Inverse Demand Curve for a Monopolist Changes from P

question 70

Multiple Choice

The inverse demand curve for a monopolist changes from P = 100 - 2Q to P = 120 - 2Q, while the marginal cost of production remains unchanged at a constant $20. After the change in the demand curve, the profit-maximizing price rises from _____, and the profit-maximizing output rises from _____.

• A) $40 to $60; 20 units to 30 units
• B) $60 to $70; 20 units to 25 units
• C) $10 to $20; 100 units to 120 units
• D) $50 to $60; 10 units to 12 units

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Definitions:

Social Choice

The problem of deciding what society wants. The process of adding up individual preferences to make a choice for society as a whole.

Estate

The property that a person owns at the time of his or her death.

Stock Measure

An assessment or quantification of a resource or asset at a specific point in time.

Irving Fisher

An American economist known for his work in the fields of statistics, monetary theory, and interest rates.