SCENARIO: a MONOPOLIST A Monopolist Faces a Demand Curve Given by P =

question 18

Multiple Choice

SCENARIO: A MONOPOLIST
A monopolist faces a demand curve given by P = 20 - Q and has total
Costs given by TC = Q2.By using a bit of calculus, you should be able
To determine that the firm's marginal revenue is MR = 20 - 2Q and its
Marginal cost is MC = 2Q.
Reference: Ref 9­1
(Scenario: A Monopolist) What is its profit­maximizing price?

• A)$20
• B)$15
• C)$10
• D)$5

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Definitions:

Capital Employed

The total amount of capital used for the acquisition of profits by a firm or project, including equity, debt, and long-term liabilities.

Transfer Pricing Policy

Regulations and practices concerning the pricing of goods, services, and intangibles transferred within an organization between different business units or divisions.