Gce Model Questions Vol1 2017 Economics Question 41

Practice objective / multiple choice question 41 from the 2017 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2017 Economics Objective / Multiple Choice Medium Difficulty
Question 41 GCE_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • objective

A monopolist faces the linear demand curve \( P = 120 - 2Q \) and has a constant marginal cost of \(30\). Fixed costs are \(200\). (a) Determine the profit‑maximising output and price. (b) Calculate the dead‑weight loss compared with perfect competition.

Answer Options

A. Profit‑maximising output \(Q^{*}=25\), price \(P^{*}=70\); dead‑weight loss = £600.00
B. Profit‑maximising output \(Q^{*}=20\), price \(P^{*}=80\); dead‑weight loss = £450.00
Correct Answer C. Profit‑maximising output \(Q^{*}=22.5\), price \(P^{*}=75\); dead‑weight loss = £506.25
D. Profit‑maximising output \(Q^{*}=30\), price \(P^{*}=60\); dead‑weight loss = £750.00
Correct Answer
C
Correct Option:
Profit‑maximising output \(Q^{*}=22.5\), price \(P^{*}=75\); dead‑weight loss = £506.25

About This Question

This is Gce Model Questions Vol1 2017 Economics Question 41. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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