Suppose P = 20 − 2Q Is the Market Demand

question 33

Multiple Choice

Suppose P = 20 − 2Q is the market demand function for a local monopoly.The marginal cost is 2Q.If fixed costs are zero and the firm engages in two-part pricing,the most profits the firm will earn is:

• A) $5.
• B) $10.
• C) $25.
• D) $50.