A Monopolist Faces the Inverse Demand Function Described by P

question 57

Multiple Choice

A monopolist faces the inverse demand function described by p = 50 - 4q, where q is output. The monopolist has no fixed cost and his marginal cost is $5 at all levels of output. Which of the following expresses the monopolist's profits as a function of his output?

• A) 50 - 4q - 5
• B) 50 - 8q
• C) 45q - 4q²
• D) 50q - 4q² - 5
• E) None of the above.

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Definitions:

Variability

A quantitative measure that describes the degree to which scores in a distribution are spread out or clustered together.

Standard Deviation

A measure of variability that represents the average amount by which individual scores in a distribution vary from the mean.

Variance

A measure of variability that represents the mean of all squared deviation scores.

Nominal

Scale used to classify or categorize data into groups that have different names but are not related to each other in any other systematic way.