A Firm with Market Power Faces the Demand Function Q

question 49

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. If the firm behaves as a single-price monopoly, the firm's optimal price is $____.

• A) 751.25
• B) 510.45
• C) 326.75
• D) 248.75

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Definitions:

Release

The act of making something available to the public, or allowing a substance, energy, etc., to emerge.

Ball

A spherical object; in mathematics, the set of all points in space at or below a certain distance from a given point.

Rectangle

A four-sided shape that has four 90-degree angles, with its opposing sides being parallel and of the same length.

Perimeter

The total length around the boundary of a two-dimensional shape.