Suzanne Is the Monopoly Seller of an Illegal Product in a Particular

question 8

Multiple Choice

Suzanne is the monopoly seller of an illegal product in a particular city.Her marginal cost is $10 per unit and she has no other costs.She faces a demand curve of P = 130 - q, and she charges a linear price to her clients.Unfortunately for Suzanne, in the city there is a corrupt government official who has the power to shut Suzanne's operation down.This official, however, is willing to take a bribe and let Suzanne continue to sell.What is the highest bribe that Suzanne is willing to pay?

• A)$3200
• B)$1250
• C)$3600
• D)$5000
• E)$6400

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Definitions:

Specialized Inputs

Resources or materials that are tailored for specific tasks or industries, enhancing the efficiency and quality of production.

Rent-Seeking Behavior

Activities by individuals or firms aimed at securing economic gain without contributing to productivity, typically through political lobbying for favorable regulations or monopolistic advantages.

X-Inefficiency

The difference between efficient production levels and actual production due to mismanagement, lack of competitive pressure, or other organizational inefficiencies.

Pure Competition

A market structure characterized by an extremely large number of sellers and buyers where no single participant has the market power to influence product prices.