A Monopolist Has a Marginal Cost of $10 and No

question 76

Multiple Choice

A monopolist has a marginal cost of $10 and no fixed cost.It faces the following inverse demand curve: p = 80 - q.The monopolist can engage in an advertising campaign that leads to a new inverse demand curve represented by p = 100 - q.What is the maximum amount that the monopolist is willing to spend in this campaign?

• A) $650
• B) $800
• C) $1,000
• D) It cannot be determined.

---

Definitions:

Sliding Fit

A type of fit between two mechanical components that allows for smooth sliding movement, often used in parts where motion is required.

Maximum Clearance

The largest allowable gap in a fit between two mating parts, ensuring that even at the upper limit of tolerance, the parts will not interfere with each other.

Clearance Fit

A type of fit where there is always a space or clearance between the mating parts, ensuring no interference during assembly.

Shaft

A cylindrical object or component that transmits rotational force or motion from one part of a machine to another.