Use the Following to Answer Questions

question 91

Multiple Choice

Use the following to answer questions :
Scenario: Monopolistically Competitive Firm
For a monopolistically competitive firm,the demand curve is given by Q = 160 - P,and the firm's cost functions are MC = 20 + 2Q and TC = 20Q + Q² + 20.
-(Scenario: Monopolistically Competitive Firm) Use Scenario: Monopolistically Competitive Firm.Given the information in the scenario,what is the profit-maximizing level of output for this firm in the short run?

• A) 160 units
• B) 20 units
• C) 35 units
• D) 180 units

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Definitions:

Price Discrimination

The approach of marketing identical products to various customers at various prices, determined by their readiness to pay.

Network Externalities

The effect that an additional user of a good or service has on the value of that product to others.

Value Of The Good

The importance, worth, or usefulness of a good to consumers, often reflected in the price they are willing to pay.

Consumer Surplus

The contrast in the overall payment consumers have the willingness and fiscal capability to make for a good or service, compared to the payment they actually make.