A Firm with a Demand Curve P = 10 -

question 57

Multiple Choice

A firm with a demand curve P = 10 - Q is a perfect price discriminating monopolist with zero marginal costs and fixed costs of 12.Consider the following two statements comparing the price discriminating case with a single price monopolist.1) In this case consumers are better off as a group because more of the product is produced.2) Producers are better off because they have higher profits.Which of the following comments about these statements is true?

• A)Both statements are true
• B)Only the first statement is true
• C)Only the second statement is true
• D)Both statements are false

---

Definitions:

Time Variance

The difference between the planned amount of time to complete a project or task and the actual time taken.

Total Cost Variance

The difference between the actual cost and the standard or expected cost of goods or services produced over a given period.

Standard Cost

A predetermined cost of manufacturing a product or providing a service, used for budgetary and inventory purposes.

Price Variance

The difference between the standard cost of a product or service and its actual cost, used in budgeting and financial analysis.