Gce Model Questions Vol1 2020 Economics Question 43

Practice objective / multiple choice question 43 from the 2020 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2020 Economics Objective / Multiple Choice Medium Difficulty
Question 43 GCE_MODEL_QUESTIONS_VOL1 • 2020 • ECONOMICS • objective

A market's demand curve is \(P = 200 - 2Q\). A firm operating under perfect competition has a constant marginal cost of \(MC = 40\). The same firm, if it were a monopoly, would face the same demand and marginal cost.\n(a) Determine the equilibrium price and quantity under perfect competition.\n(b) Determine the monopoly price and quantity.\n(c) Calculate the dead‑weight loss caused by the monopoly.

Answer Options

A. (a) P=50, Q=75; (b) P=120, Q=40; (c) DWL=1{,}600
B. (a) P=40, Q=80; (b) P=120, Q=30; (c) DWL=2{,}000
Correct Answer C. (a) P=40, Q=80; (b) P=120, Q=40; (c) DWL=1{,}600
D. (a) P=40, Q=80; (b) P=100, Q=50; (c) DWL=1{,}200
Correct Answer
C
Correct Option:
(a) P=40, Q=80; (b) P=120, Q=40; (c) DWL=1{,}600

About This Question

This is Gce Model Questions Vol1 2020 Economics Question 43. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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