A Monopolist Has a Marginal Cost of $4 and No

question 23

Multiple Choice

A monopolist has a marginal cost of $4 and no fixed cost.It faces the following inverse demand curve: p = 40 - q.The monopolist can introduce a new packaging for its product.Such new packaging does not alter the marginal cost.It makes the product more attractive for the consumer,and it would lead to a new inverse demand curve p = 40 - 0.5q.What is the maximum amount that the monopolist would be willing to invest in this new packaging project?

• A) $245
• B) $324
• C) $420
• D) It cannot be determined.

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Definitions:

Matrix Differentiation

A network-like organizational structure that allows for multiple reporting lines and integrates functional and project-based responsibilities.

Spatial Differentiation

The degree to which locations of an organization's units are physically separated, impacting coordination and operational efficiency.

Circular Differentiation

The process of distinguishing entities or elements in a system based on their roles, attributes, or positions in a circular, rather than linear, hierarchy.

Lateral Differentiation

The way in which an organization segregates its operations and responsibilities across the same hierarchical level.