A Profit-Maximizing Monopolist Faces a Demand Function Given by Q

question 67

Multiple Choice

A profit-maximizing monopolist faces a demand function given by q = 1000 - 20p, where p is the price of her output in dollars.She has a constant marginal cost of 20 dollars per unit of output.In an effort to induce her to increase her output, the government agrees to pay her a subsidy of $10 for every unit that she produces.She will

• A)increase her price and lower her output.
• B)decrease her price by $5 per unit.
• C)decrease her price by $10 per unit.
• D)decrease her price by more than $10 per unit but by less than $16 per unit.
• E)decrease her price by more than $16 per unit.

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Definitions:

T-Accounts

T-Accounts are a tool used in accounting to visualize credit and debit transactions for individual accounts, resembling the letter “T”.

Account Payable

An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors or suppliers.

T-Accounts

A bookkeeping tool used to visualize and manage debits and credits for individual accounts.

Services Provided

Tasks or duties performed for clients or customers that often constitute the business's revenue basis.