All Consumers Are Alike and Each Has an Inverse Demand

question 4

Multiple Choice

All consumers are alike and each has an inverse demand curve for a monopolist's product of P = 100 - 2Q. The marginal cost of production is constant at MC = $10. Let the monopolist charge a price of $10 per unit purchased and a subscription fee of $2025 that must be paid by each purchaser. What is the amount of consumer's surplus generated by this scheme?

• A) 0
• B) $2025
• C) $2025 multiplied by the number of consumers in the market.
• D) $90 multiplied by the number of units purchased.

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; indicating how much a stock’s price might swing.

Portfolio

An assortment of financial assets comprising stocks, bonds, commodities, alongside cash and cash equivalents, as well as closed-end funds and exchange traded funds (ETFs).

Portfolio Beta

A measure that evaluates the risk of an investment portfolio by determining how sensitive it is to market movements.