Suppose a Monopolist Has TC = 40 + 10Q

question 108

Multiple Choice

Suppose a monopolist has TC = 40 + 10Q + Q²,and the demand curve it faces is p = 130 - 2Q.What is the Lerner index of this profit-maximizing monopolist?

• A) 0.222
• B) 0.35
• C) 0.444
• D) 0.50

---

Definitions:

Price-Inelastic

A scenario where the demand for a good or service is relatively unchanged when the price varies.

Total Revenues

The total sum of money received by a company for goods sold or services provided during a certain period.

Grains

Refers to small, hard seeds, especially the seeds of plants such as wheat, corn, oats, barley that are used for food.

Price-Elastic

describes a market condition where the demand for a product changes significantly in response to a change in its price.