Suppose a Firm Faces the Inverse Demand Curve P =

question 90

Multiple Choice

Suppose a firm faces the inverse demand curve P = 100 - Q. Marginal cost is constant at $10.
Suppose the firm uses block pricing, selling the first 45 units at $55 per unit, the next 20 units at $35 per unit, and the next 20 units at $15 per unit. The deadweight loss in this case is $____.

• A) 0
• B) 6.50
• C) 9.75
• D) 12.50

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