Refer to the Demand and Cost Data for a Pure

question 156

Multiple Choice

Refer to the demand and cost data for a pure monopolist given in the table. If the monopolist perfectly price-discriminated and sold each unit of the product at the maximum price the buyer of that unit would be willing to pay, and if the monopolist maximized profits, then the total profit received would be

• A)$700.
• B)$190.
• C)$540.
• D)$70.

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Definitions:

Monopolistically Competitive Industry

A market structure characterized by many firms selling products that are similar but not identical, allowing for competition based on factors other than price.

Product Differentiation

The strategy businesses use to distinguish their products from those of competitors, through variations in quality, features, design, or branding.

Physical Differences

Variations in the tangible characteristics or attributes of a product, which can affect consumer preference and value perception.

Long-run Equilibrium

A state in which all factors of production can be adjusted, and all economic agents have fully adapted to any changes, resulting in a stable economy with no tendency for change.