A Firm with a Demand Curve P = 10 -

question 29

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.

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Definitions:

Design Dimensions

Fundamental aspects or characteristics that define and describe the structure, function, and scope of a design or system.

Centralization

The concentration of decision-making authority at upper levels of an organizational hierarchy.

Demand Instrument

A financial document or security that requires payment of the specified amount on demand by the holder, without specifying a particular time for repayment.

Bearer Instrument

A negotiable financial instrument that is not registered in anyone's name and can be transferred from one person to another by possession.