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Aletheia Is a Monopoly Supplier of a Product in a Seaside

Question 2

Multiple Choice

Aletheia is a monopoly supplier of a product in a seaside city.Her marginal cost is $5 per unit and she has no fixed costs.The market demand curve for the product is P = 25 - q.What are the profit-maximizing price, quantity, profit and DWL if Aletheia charges the same price to all her customers?


A) P = $5, q = 10 units, π = $75, DWL = $25
B) P = $15, q = 10 units, π = $100, DWL = $100
C) P = $5, q = 5 units, π = $10, DWL = $40
D) P = $10, q = 10 units, π = $50, DWL = $25
E) P = $15, q = 10 units, π = $100, DWL = $50

Correct Answer:

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