A Monopolist Faces the Demand Curve Q = 90 -

question 41

Multiple Choice

A monopolist faces the demand curve q = 90 - p/2, where q is the number of units sold and p is the price in dollars.He has quasi-fixed costs, C, and constant marginal costs of $20 per unit of output.Therefore his total costs are C + 20q if q > 0 and 0 if q = 0.What is the largest value of C for which he would be willing to produce positive output?

• A)$3,200
• B)$2,560
• C)$4,800
• D)$20
• E)$3,840

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