Scenario: Tobac Co

question 82

Multiple Choice

Scenario: Tobac Co. is a monopolist in the cigarette market in Nicotiana Republic, where the U.S. dollar is used as the official currency. The firm faces the demand curve shown below. The firm has a constant marginal cost of $2.00 per pack. The fixed cost of the firm is $50 million. To answer the questions below, it is useful to know that the equation of the (inverse) demand curve is P = 8 - 0.04Q, where Q is the quantity demanded (in millions of packs) and P is the price per pack (in $) . Also, you should draw in the marginal revenue curve.

-Refer to the scenario above.When the quantity sold goes up from 100 million to 150 million packs of cigarettes,the price effect on the firm's revenue is ________ and the quantity effect is ________.

• A) -$200 million; $100 million
• B) -$100 million; $200 million
• C) $200 million; -$100 million
• D) $100 million; -$200 million

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Definitions:

Supportive Leadership

A leadership approach that focuses on providing encouragement, resources, and support to team members to help them achieve their goals.

Organizational Commitment

The psychological attachment or loyalty an employee has towards their organization, influencing their willingness to work and stay.

Performance Goals

Targets set for an individual's or group's achievement that focus on the outcome of a task or project.

Specific Target Date

A clearly defined date by which a particular goal or task is aimed to be completed.