Suppose a Monopolist's Demand Curve Is P = 60 -

question 6

Multiple Choice

Suppose a monopolist's demand curve is P = 60 - Q,and its cost function is C = 10Q + 50 so its marginal cost is 10.If a governmental agency wished to set the price so that it created the smallest deadweight loss without causing the monopolist to have negative economic profits (thus shutting down) ,that price would be

• A) $10.00.
• B) $11.02.
• C) $14.57.
• D) $35.00.

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Definitions:

Net Fixed Assets

The value of a company’s property, plant, and equipment minus any accumulated depreciation, indicating the tangible assets' net book value.

Liquid Asset

Assets that can be quickly and easily converted into cash without significant loss of value, including cash itself, marketable securities, and accounts receivable.

Cash Flow From Assets

The total amount of cash generated by a company’s business operations after accounting for capital expenditures and additions to net working capital.

Book Value

The value of an asset according to its balance sheet account balance, representing the cost of the asset minus accumulated depreciation.