A Monopolist Has Discovered That the Inverse Demand Function of a Person

Multiple Choice

A monopolist has discovered that the inverse demand function of a person with income M for the monopolist's product is p = .002 M -0 q.The monopolist is able to observe the incomes of its consumers and to practice price discrimination according to income (second-degree price discrimination) .The monopolist has a total cost function, c(q) = 100q.The price it will charge a consumer depends on the consumer's income, M, according to the formula

A) p = .001 M + 50.
B) p = .002 M - 100.
C) p = M ².
D) p = .01 M ² + 100.
E) None of the above.