A Monopolist Faces Linear Inverse Demand $P = a - b Q$

question 52

Multiple Choice

A monopolist faces linear inverse demand $P = a - b Q$ and constant marginal cost, $c$ . Which of the following gives a correct formula for the monopolist's profit maximizing price?

• A) \(P = ( a / b - c )\)
• B) \(P = a / 2\).
• C) \(P = ( a + c ) / 2\)
• D) \(P = a / 2 + c\).

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