Multiple Choice
A monopolist has the total cost function c(q) = 800 +8q.The inverse demand function is 80 - 6q, where prices and costs are measured in dollars.If the firm is required by law to meet demand at a price equal to its marginal costs,
A) the firm's profits will be zero.
B) the firm will lose $400.
C) the firm will make positive profit but not as much profit as it would make if it were allowed to choose its own price.
D) the firm will lose $800.
E) the firm will lose $480.
Correct Answer:
Verified
Correct Answer:
Verified
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