An Additional Cost of $50 Per Unit Is Incurred by a Firm

question 7

Multiple Choice

An additional cost of $50 per unit is incurred by a firm when selling to its non- EU customers compared to its EU customers. The demand function is the same in both markets and is given by 20P + Q = 5000 and the total cost function is given by TC = 40Q + 2000, Where Q is total demand.
Find the maximum profit with price discrimination.

• A)$107,500
• B)$476,500
• C)$545,000
• D)$254,000
• E)$346,500

---

Definitions:

Stereotype Threat

The risk of confirming negative stereotypes about an individual's racial, ethnic, gender, or cultural group, which can hinder performance.

Math Problem-Solving

The process of using mathematical methods and techniques to address and solve problems or equations.

Emotional Uncertainty

The feeling of confusion or ambiguity regarding one's own emotions or how to interpret the emotions of others.

Distorting Reasoning

A cognitive process involving the manipulation or twisting of thinking in a way that produces a negative, distorted perception.