The Inverse Demand Curve for a Firm with Market Power

question 13

Multiple Choice

The inverse demand curve for a firm with market power is P = 60 - Q, and its marginal cost is given by MC = 2Q. If the firm decides to practice first-degree price discrimination, the deadweight loss will:

• A) decrease from $37.50 to $0.
• B) decrease from $45 to $15.
• C) increase from $0 to $65.
• D) increase from $30 to $45.

---

Definitions:

Undue Influence

A legal term describing a situation where an individual is able to persuade another's decisions due to the relationship between the two parties, often leading to unfair outcomes.

Duress Of Goods

A situation where goods are obtained or retained through coercion, or the wrongful collection of goods under pressure.

Ethical Policy

A set of guidelines that outlines the principles and values governing the behavior of individuals or organizations.

Duress

Compulsion, force, or pressure applied to someone to coerce them into taking an action against their will or better judgement.