A Firm with Market Power Faces the Demand Function Q

question 159

Multiple Choice

A firm with market power faces the demand function q = 1,000 - P. The firm's total cost function is TC(q) = 5q + q² + 500. If a firm behaves like a perfectly price-discriminating monopolist, it will produce ____ units.

• A) 421.67
• B) 354.25
• C) 331.67
• D) 248.75

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Definitions:

Short-Term Investments

Financial assets that are expected to be converted into cash or sold within a year.

Seasonal Fluctuations

Variations in business activity, sales, or performance that occur regularly at certain times of the year due to the season.

Debt Securities

Financial tools that signify an investor lending money to a borrower, commonly consisting of bonds, notes, and bills.

Speculative Reasons

Motivations based on speculation where actions are taken with the expectation of future financial gains or losses.