Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table below shows the reservation prices of the eight students enrolled in the class.StudentReservation Price($/Book)Q60R54S48T42U36V30W30X30 If Campus Books is permitted to charge 2 prices, and the bookstore knows customers with a reservation price above $30 never bother with coupons, whereas those with a reservation price of $30 or less always use them, then what will be the bookstore's total economic profit?
A. $158
B. $150
C. $154
D. $130
Answer: A
You might also like to view...
A mathematical technique used to solve constrained optimization problems (finding the consumer optimum, for example) is:
A) the method of Lagrange multipliers. B) the Cobb-Douglas method. C) the Slutsky method. D) the Hicks substitution method.
An increase in taxes will have a greater effect on the equilibrium GDP:
A. if the tax revenues are redistributed through transfer payments. B. the larger the MPS. C. the smaller the MPC. D. the larger the MPC.
In theory, if a profit-maximizing firm in a perfectly competitive labor market found it advantageous to hire one less worker, the firm should pay a
A. lower wage rate to all previous workers hired. B. higher wage rate to all previous workers hired. C. higher wage rate but only to the most recently hired workers. D. lower wage rate but only to the most recently hired workers.
Monopolists do not face constraints on the prices they charge.
Answer the following statement true (T) or false (F)