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

Multiple Choice

Let the inverse demand curve for a monopolist's product be $P = 100 - 2 Q$ and the marginal cost of production be constant at $M C = 10$ . 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 $P _ { I } =$ $\$ 70$ and the second block provides an additional 15 units at a price of $P _ { 2 } = \$ 40$ . What is the average outlay schedule for the consumer?

A) $\frac { E } { Q } = \$ 70$ if $Q \leq 15$ and $\frac { E } { Q } = 70 - 450 / Q$ if $Q > 15$
B) $\frac { E } { Q } = \$ 70$ if $Q \leq 15$ and $\frac { E } { Q } = 40 + 450 / Q$ if $Q > 15$
C) $\frac { E } { Q } = \$ 70$ if $Q \leq 15$ and $\frac { E } { Q } = 40$ if $Q > 15$
D) $\frac { E } { Q } = \$ 70$ if $Q \leq 15$ and $\frac { E } { Q } = 70 - 40 / Q$ if $Q > 15$