Assume a Monopolist Can Prevent Resale of Its Product and It

question 163

Multiple Choice

Assume a monopolist can prevent resale of its product and it has complete information about each one of its customers. Even though each customer has a different demand curve, the seller can identify each customer's demand curve before a purchase takes place. It faces the inverse market demand of P = 160 - 10Q with marginal cost of MC = 10 + 5Q. The producer surplus at the profit-maximizing result is $____.

• A) 500
• B) 400
• C) 200
• D) 0

---

Definitions:

Gloves

Hand-worn garments intended to protect the hands from various conditions such as cold, heat, damage, or contamination.

Optimal Choice Point

In decision theory and economics, the point at which the decision maker achieves the best possible outcome under given constraints.

Budget Constraint

The limitations on the consumption bundles that a consumer can afford given their income and the prices of goods and services.

Indifference Curve

A graph showing combinations of goods among which a consumer is indifferent, meaning they give the consumer the same level of satisfaction.