Suppose a Firm That Can Perfectly Price Discriminate Faces the Demand

question 22

Multiple Choice

Suppose a firm that can perfectly price discriminate faces the demand function P = 100 - q². The firm's total production costs are given by MC(q) = q + q². If the firm can perfectly price discriminate, the output level that maximizes profit for the firm is ____.

• A) 12.64
• B) 10.89
• C) 9.51
• D) 6.83

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Definitions:

Output

In economics, output refers to the total amount of goods or services produced by a firm or country.

Factor of Production

An input used in the production of goods and services, such as land, labor, capital, and entrepreneurship.

Machines

Mechanical or electronic devices that perform tasks, often complex, without human intervention.

Buildings

Structures constructed for residential, commercial, or industrial purposes.