If the Firm Facing the Demand Curve P = 10

question 4

Multiple Choice

If the firm facing the demand curve P = 10 - Q still has zero marginal costs and is now a perfect price discriminator instead of a single price monopolist, what will profits be if fixed costs are 12?

• A)10
• B)12
• C)13
• D)38

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Definitions:

Price Fixing

Price Fixing is an illegal practice where competing companies agree to set the same price for their products or services, eliminating competition.

Conspiracy

A secret plan by a group to do something unlawful or harmful, or the belief in such secret schemes.

Product

An item, service, or idea offered to the market for consumption, use, or acquisition.

Sherman Act

A landmark federal statute in the U.S. antitrust law prohibiting monopolistic and anti-competitive practices.