A monopolist has a marginal cost of $4 and no fixed cost. It faces the following inverse demand curve: p = 40 - q. The monopolist can introduce a new packaging for its product. Such new packaging does not alter the marginal cost. It makes the product more attractive for the consumer, and it would lead to a new inverse demand curve p = 40 - 0.5q. What is the maximum amount that the monopolist
would be willing to invest in this new packaging project?
A) $245
B) $324
C) $420
D) It cannot be determined.
B
Economics
You might also like to view...
The current deficit is
A) the deficit minus government investment. B) the deficit plus net interest payments. C) the deficit minus current expenditures. D) the deficit minus depreciation.
Economics
Because the applications for "diversity immigration" into the U.S. far exceed the quota every year, the slots are filled through:
A. An annual lottery B. A first-come-first-served system C. A bidding system, allocation through prices D. Political connections
Economics