Suppose a Monopoly's Inverse Demand Curve Is P = 100

question 91

Multiple Choice

Suppose a monopoly's inverse demand curve is P = 100 -Q,it produces a product with a constant marginal cost of 20,and it has no fixed costs.How much more or less is the deadweight loss if the monopoly can practice perfect price discrimination compared to it practicing uniform pricing?

• A) The deadweight loss is smaller by 800.
• B) The deadweight loss is greater by 800.
• C) The deadweight loss is smaller by 1600.
• D) The deadweight loss is greater by 1600.

Identify the role of taxation and depreciation in affecting project cash flow.

Understand the concept of net working capital and its importance in project evaluation.

Appreciate the role of opportunity costs in project analysis.

Understand the significance of after-tax cash flows in capital budgeting.

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Definitions:

Similarity Error

An error in judgment where individuals assess others based on their own characteristics or beliefs, rather than objective criteria.

Person Perception

Involves the process by which individuals form impressions and make judgments about other people.

First-impression Error

The tendency to form lasting opinions about an individual or situation based on the initial impressions, which can often be inaccurate.

Negative Information

Data or facts that portray an adverse or unfavorable condition or aspect.