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.

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