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

question 19

Multiple Choice

If a monopolist faces an inverse demand curve, p(y) = 100 - 2y and has constant marginal costs of $32 and zero fixed costs and if this monopolist is able to practice perfect price discrimination, its total profits will be

• A)$1,156.
• B)$17.
• C)$578.
• D)$1,734.
• E)$289.

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Definitions:

Period Cost

Expenses that are not directly tied to the production process and are instead expensed in the period they are incurred.

Variable Cost

Costs that change in proportion to the level of output or activity, such as materials and labor involved directly in production.

Fixed Cost

Expenses that do not change in proportion to the volume of goods or services a company produces, such as rent, salaries, and insurance premiums.

Product Cost

The total cost associated with making or acquiring a product, including direct materials, direct labor, and overhead.