A Firm Faces the Demand Curve Q = 20 -

question 68

Multiple Choice

A firm faces the demand curve Q = 20 - 0.8P and marginal cost MC = 2.5Q.
If the firm can perfectly price discriminate, it will sell ____ units to maximize profit.

• A) 0
• B) 2.3
• C) 4.67
• D) 6.67

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Definitions:

Milling Machine Minutes

A measure of manufacturing time that represents the total minutes a milling machine is engaged in production.

Monthly Demand

The total quantity of a product or service that consumers are willing and able to purchase in a month.

Selling Price

The amount a buyer pays to purchase a product, determined by cost, market demand, and competition.

Direct Materials

Raw materials that are directly traced and integral to the finished product.