Suppose the inverse demand for a product is P(Q) 30-2Q. This implies that the marginal revenue is MR(Q) =30-4Q. The total cost of production is C(Q) =20+Q?, which implies that the marginal cost is MC(Q) =2Q. The deadweight loss from monopoly power in this market is O A) 7.5 O B) 50 OC) 25 D) 10

Suppose the inverse demand for a product is P(Q) 30-2Q. This implies that the marginal revenue is MR(Q) =30-4Q. The total cost of production is C(Q) =20+Q?, which implies that the marginal cost is MC(Q) =2Q. The deadweight loss from monopoly power in this market is O A) 7.5 O B) 50 OC) 25 D) 10

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter24: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 13CQ

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Question

Suppose the inverse demand for a product is P(Q) =30-2Q. This implies that the
marginal revenue is MR(Q) =30-4Q. The total cost of production is C(Q) =20+Q?,
which implies that the marginal cost is MC(Q) =2Q. The deadweight loss from
monopoly power in this market is
OA) 7.5
O B) 50
O C) 25
O D) 10
E) 15
OF) 12.5

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