Suppose a Monopolist Faces a Demand Curve Q = AP^-B $P = C ( 1 - 1 / b )$

question 1

Multiple Choice

Suppose a monopolist faces a demand curve Q = aP^-b and that the monopolist has a constant marginal cost of C. The monopolist's profit-maximizing price is

• A) \(P = C ( 1 - 1 / b )\)
• B) \(P = C ( 1 / b )\)
• C) \(P = C \left( \frac { 1 } { 1 - 1 / b } \right)\)
• D) P = C(-1/b)

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Definitions:

Unearned Revenue Account

Refers to money received by a company for goods or services yet to be delivered or performed, recognized as a liability on the balance sheet.

Debit Balance

An accounting term indicating that a particular account has more debits than credits, often referring to an account's overall debt or expenditure.

Credit Balance

In accounting, it refers to the balance on the right side of a ledger account, indicating the amount that a company owes or liabilities.

Revenue Account

An account that tracks the income generated from normal business operations, including the sale of goods and services.