A Monopolist Has Discovered That the Inverse Demand Function of a Person

question 11

Multiple Choice

A monopolist has discovered that the inverse demand function of a person with income M for the monopolist's product is p = .002M - q. The monopolist is able to observe the incomes of its consumers and to practice price discrimination according to income (second-degree price discrimination) . The monopolist has a total cost function, c(q) = 100q. The price it will charge a consumer depends on the consumer's income, M, according to the formula

• A) p = .001M + 50.
• B) p = .002M - 100.
• C) p = M².
• D) p = .01M² + 100.
• E) None of the above.

Evaluate expressions with powers and roots accurately.

Understand and apply the distributive property to expand algebraic expressions.

Apply the concept of rational expressions in simplification.

Solve and simplify equations involving exponents and radicals.

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Definitions:

Distribution Network

The interconnected group of storage facilities and transportation systems that move goods from producers to consumers.

Closed-Loop MRP

A Materials Requirement Planning system that provides feedback on inventory levels, production, and purchase orders, enabling continuous updates and adjustments.

Dependent Demand

The need for materials or components directly tied to the demand for final products, where changes in the product demand impact the demand for materials.

Independent Demand

Independent demand is the need for a finished product or service that is not directly influenced by the demand for other products or services.