Suppose a monopolist faces the following market demand equation: Q=200 - 2P, where Q is the quantity demanded and P is the price charged to all customers. Furthermore, suppose the firm faces the following total cost (TC): TC = 50Q. (19] Rather than charge the same price to every consumer, if this firm can practice first degree price discrimination, then the cumulative amount the firm should sell equals: A. 20 В. 40 C. 80 D. 100 [20] Rather than charge the same price to every consumer, if this firm can practice first degree price discrimination, then consumer surplus equals: А. S1200 В. $625 C. $400 D. None of the above [21] Rather than charge the same price to every consumer, if this firm can practice first degree price discrimination, then the firm's profit will exceed $2000. A. True В. False
Suppose a monopolist faces the following market demand equation: Q=200 - 2P, where Q is the quantity demanded and P is the price charged to all customers. Furthermore, suppose the firm faces the following total cost (TC): TC = 50Q. (19] Rather than charge the same price to every consumer, if this firm can practice first degree price discrimination, then the cumulative amount the firm should sell equals: A. 20 В. 40 C. 80 D. 100 [20] Rather than charge the same price to every consumer, if this firm can practice first degree price discrimination, then consumer surplus equals: А. S1200 В. $625 C. $400 D. None of the above [21] Rather than charge the same price to every consumer, if this firm can practice first degree price discrimination, then the firm's profit will exceed $2000. A. True В. False
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Use the following to answer questions (19) - (21):
Suppose a monopolist faces the following market demand equation: Q= 200 - 2P, where Q is the quantity
demanded and P is the price charged to all customers. Furthermore, suppose the firm faces the following
total cost (TC): TC = 50Q.
[19]
discrimination, then the cumulative amount the firm should sell equals:
Rather than charge the same price to every consumer, if this firm can practice first degree price
A.
20
В.
40
С.
80
D.
100
[20]
discrimination, then consumer surplus equals:
Rather than charge the same price to every consumer, if this firm can practice first degree price
$1200
$625
A.
В.
С.
$400
D.
None of the above
[21]
discrimination, then the firm's profit will exceed $2000.
Rather than charge the same price to every consumer, if this firm can practice first degree price
A.
True
В.
False
[22]
predatory pricing.
According to the Areeda-Turner rule, pricing below
is suggestive of a firm engaging in
A.
total revenue
В.
average total cost
average variable cost
All of the above
С.
D.
[23]
is accounted for by the Differential Collusion Hypothesis.
Increases in concentration increase price-cost margins by enhancing cooperation among firms. This
A.
True
В.
False
[24]
incentive for a firm to secretly cut its price (below an agreed upon price) increases.
Adopting a “meet the competition" clause makes it more difficult to sustain cooperation, since the
A.
True
В.
False](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb17dca31-9e9b-409c-a2ff-191d71fb3cfd%2F1dfc47b6-7bd4-4859-86a0-361fe59b37e6%2F6cjltsb_processed.png&w=3840&q=75)
Transcribed Image Text:Use the following to answer questions (19) - (21):
Suppose a monopolist faces the following market demand equation: Q= 200 - 2P, where Q is the quantity
demanded and P is the price charged to all customers. Furthermore, suppose the firm faces the following
total cost (TC): TC = 50Q.
[19]
discrimination, then the cumulative amount the firm should sell equals:
Rather than charge the same price to every consumer, if this firm can practice first degree price
A.
20
В.
40
С.
80
D.
100
[20]
discrimination, then consumer surplus equals:
Rather than charge the same price to every consumer, if this firm can practice first degree price
$1200
$625
A.
В.
С.
$400
D.
None of the above
[21]
discrimination, then the firm's profit will exceed $2000.
Rather than charge the same price to every consumer, if this firm can practice first degree price
A.
True
В.
False
[22]
predatory pricing.
According to the Areeda-Turner rule, pricing below
is suggestive of a firm engaging in
A.
total revenue
В.
average total cost
average variable cost
All of the above
С.
D.
[23]
is accounted for by the Differential Collusion Hypothesis.
Increases in concentration increase price-cost margins by enhancing cooperation among firms. This
A.
True
В.
False
[24]
incentive for a firm to secretly cut its price (below an agreed upon price) increases.
Adopting a “meet the competition" clause makes it more difficult to sustain cooperation, since the
A.
True
В.
False
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