If a Monopolist Faces an Inverse Demand Curve, P(y) =

question 15

Multiple Choice

If a monopolist faces an inverse demand curve, p(y) = 100 - 2y and has constant marginal costs of $32 and zero fixed costs and if this monopolist is able to practice perfect price discrimination, its total profits will be

• A) $1,156.
• B) $17.
• C) $578.
• D) $1,734.
• E) $289.

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Definitions:

Excise Tax

A tax on the sale or use of specific products or transactions.

Tax Burden

The total amount of taxes paid by an individual, corporation, or sector, often expressed as a percentage of income or GDP.

Price Paid

The amount of money exchanged for a good or service.

Consumers

Individuals or groups that purchase goods and services for personal use.