A Firm with Market Power Has the Inverse Demand Curve

question 82

Multiple Choice

A firm with market power has the inverse demand curve P = 90 - 1.5Q and marginal cost curve MC = 10 + Q. If the firm decides to practice perfect price discrimination, its profit-maximizing output level will:

• A) increase from 14 to 28 units.
• B) decrease from 24 to 12 units.
• C) increase from 20 to 32 units.
• D) decrease from 28 to 14 units.

---

Definitions:

Aseptic Technique

Practices and procedures performed under sterile conditions aimed at minimizing the risk of infection.

Serrations

Notches or jagged edges found on tools, knives, or some types of leaves, designed to improve function or efficiency.

Contamination

The undesirable introduction of impurities or harmful substances into or on to a clean or pure environment, making it unsafe.

Microorganisms

Tiny living organisms, such as bacteria, viruses, fungi, and algae, that can be seen only with a microscope.