Let the Inverse Demand Curve for a Monopolist's Product Be $P = 100 - 2 Q$

question 23

Multiple Choice

Let the inverse demand curve for a monopolist's product be $P = 100 - 2 Q$ and the marginal cost of production be constant at $M C = 10$ . Suppose that the firm considers moving from a uniform pricing strategy to a two-block tariff where the first block provides 15 units at a price of $P _ { I } =$ $\$ 70$ and the second block provides an additional 15 units at a price of $P _ { 2 } = \$ 40$ . How much does the monopolist's profit rise with this scheme?

• A) \(\$ 225\)
• B) \(\$ 337.50\)
• C) \(\$ 450.50\)
• D) \(\$ 512\)

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