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

question 10

Multiple Choice

If a monopolist faces an inverse demand curve, p(y) = 100 - 2y and has constant marginal costs of $24 and zero fixed costs and if this monopolist is able to practice perfect price discrimination, its total profits will be

• A)$1,444.
• B)$19.
• C)$2,166.
• D)$722.
• E)$361.

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Definitions:

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or the real yield on an investment.

Actual Rate

The real, observed interest rate in the market, not adjusted for inflation.

Inflation

The rate at which prices for general goods and services increase, lessening the ability to buy.

Economic Losses

Financial detriment or the reduction in economic value as a result of events such as natural disasters, market downturns, or policy changes.