A Profit-Maximizing Monopolist Has the Cost Schedule C(y) = 20y

question 67

Multiple Choice

A profit-maximizing monopolist has the cost schedule c(y) = 20y. The demand for her product is given by , where p is her price. Suppose that the government tries to get her to increase her output by giving her a subsidy of $15 for every unit that she sells. Giving her the subsidy would make her

• A) decrease her price by $7.50.
• B) decrease her price by $15.
• C) decrease her price by $20.
• D) decrease her price by $35.
• E) leave her price unchanged.

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Definitions:

Direct Labor Hours

A measure of the total amount of time workers spend on direct production activities.

Unfavorable

A term often used in finance and accounting to describe results or variances that are worse than expected or budgeted.

Nonfinancial Performance Measures

Metrics used to assess aspects of an organization's performance that are not directly related to financial outcomes, such as customer satisfaction and employee engagement.

Company Performance

An evaluation of a company's financial and operational effectiveness, typically measured by metrics such as revenue, profitability, and market share.