A Firm with Market Power Faces the Demand Function Q

question 20

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. The output that maximizes total surplus in this market is ____.

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

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Definitions:

Quality

An attribute or characteristic that determines the degree of excellence or superiority of something.

Quantity

A property that describes the numerical extent or amount of something.

Quality

Evaluating the caliber of an object by comparing it to its counterparts; the highness of its excellence.

Quantity

The amount or number of a material or immaterial thing not requiring a unit of measurement.