Let the Inverse Demand Curve for a Monopolist's Product Be

question 36

Multiple Choice

Let the inverse demand curve for a monopolist's product be P = 100 - 2Q and the marginal cost of production be constant at MC = 10. Suppose that the firm considers moving from a uniform pricing strategy to a two-block tariff where the first block provides 15 units at a price of P₁ = $70 and the second block provides an additional 15 units at a price of P₂ = $40. How much does the monopolist's profit rise with this scheme?

• A) $225
• B) $337.50
• C) $450.50
• D) $512

Understand the relationships between prices and quantity demanded or supplied.

Recognize the effects of shifts in supply and demand curves on market outcomes.

Define demand and understand the factors that affect it.

Describe the role of competition in driving market prices towards equilibrium.

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Definitions:

Balance Theory

A psychological theory suggesting that people prefer harmony and consistency in their views, beliefs, and sentiments, and will change or modify them to achieve balance.

Unit Relations

The dynamics and interactions within and between units or groups in an organization, affecting its harmony and productivity.

Post-Racial

A theoretical environment in which the concept of race is said to be irrelevant; often criticized as being an ideal rather than reality.

Self-Esteem

An individual's subjective evaluation of their own worth, including beliefs and emotions about oneself, affecting mental health and behavior patterns.