If a Monopolist Faces an Inverse Demand Curve, P(y)=100 -

question 16

Multiple Choice

If a monopolist faces an inverse demand curve, p(y) =100 - 2y and has constant marginal costs of $4 and zero fixed costs and if this monopolist is able to practice perfect price discrimination, its total profits will be

• A)$24.
• B)$3,456.
• C)$2,304.
• D)$1,152.
• E)$576.

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Definitions:

Cash Investment

Funds that are invested in assets that can be quickly turned into cash, or the act of putting money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit.

Equipment Sale

The process of selling off business-owned equipment, either to upgrade to newer assets or to liquidate assets for cash.

Cash Dividend

A payment made by a company out of its earnings to its shareholders in cash.

Financing Activities

Transactions that involve raising funds to finance the company's operations and repaying debt; part of a firm's financial operations detailed on the statement of cash flows.