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

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Definitions:

Current Liabilities

Short-term financial obligations that are due to be paid within one year or within the business's operating cycle.