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Questions › JNU › JNU SIS 2016 › Q40
2 marks, −1Microeconomics › Monopoly and price discrimination › Monopoly equilibrium and marginal revenueHardabout 3 min

JNU SIS 2016 Question 40: Monopoly and price discrimination

Let the demand curve faced by a monopolist be the following : D(p)={0p>20100pp≤20D(p) = \begin{cases} 0 & p > 20 \\[2pt] \dfrac{100}{p} & p \le 20 \end{cases}D(p)=⎩⎨⎧​0p100​​p>20p≤20​ where ppp is price. Its cost function is given by C(Q)=QC(Q) = QC(Q)=Q, where QQQ is the output. What is the profit maximizing choice of output?

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Let the demand curve faced by a monopolist be the following: D(p) = { 0 p > 20; [2pt] 100/p p ≤ 20 } where p is price. Its cost function is given by C(Q) = Q, where Q is the output. What is the profit maximizing choice of output? (A) 20 (B) 15 (C) 5 (D) None of the above

Also written as: Let the demand curve faced by a monopolist be the following: D(p) = { 0 p > 20; [2pt] 100/p p <= 20 } where p is price. Its cost function is given by C(Q) = Q, where Q is the output. What is the profit maximizing choice of output?

Monopoly and price discrimination has come up 128 times in 7 exams since 2004.

What this question tests

This question is on Monopoly equilibrium and marginal revenue, part of Monopoly and price discrimination in Microeconomics.

How a monopolist sets price and output where marginal revenue equals marginal cost.

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Question from the JNU SIS 2016 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.