Solved

Let the Inverse Demand Curve for a Monopolist's Product Be P=1002QP = 100 - 2 Q

Question 23

Multiple Choice

Let the inverse demand curve for a monopolist's product be P=1002QP = 100 - 2 Q and the marginal cost of production be constant at MC=10M C = 10 . Suppose that the firm considers moving from a uniform pricing strategy to a two-block tariff where the first block provides 15 units at a price of PI=P _ { I } = $70\$ 70 and the second block provides an additional 15 units at a price of P2=$40P _ { 2 } = \$ 40 . How much does the monopolist's profit rise with this scheme?


A) $225\$ 225
B) $337.50\$ 337.50
C) $450.50\$ 450.50
D) $512\$ 512

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions