Economics · Monopoly Pricing and Profit Maximisation
A firm faces demand function P = 100 - 2Q and has total cost TC = 200 + 20Q. Which of the following are CORRECT? A. The profit-maximising output is Q* = 20. B. The profit-maximising price is P* = 60. C. Maximum profit = 600. D. The price elasticity of demand at the profit-maximising point is -1.5. E. The Lerner Index of monopoly power at Q* = 20 is 2/3.
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- 1A, B, C, D and E
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- 3A, B and D only✓
- 4A, B and C only
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A, B and D only
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