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A firm faces the demand for its product (P = 100 - 0.5Q) as shown in the figure below. It produces under conditions of constant costs in the long run, and LMC = LAC = $12 per unit. Price and cost ($ per unit) 100 112 12 0 P 100 0.5Q Quantity LMC = LAC 200 If the firm can practice first-degree price discrimination, it can make a maximum profit of .............. a) $1,872 b) $1,936 c) $7,744 d) $9,856 e) None of the above.

A firm faces the demand for its product (P = 100 - 0.5Q) as shown in the figure below. It produces under conditions of constant costs in the long run, and LMC = LAC = $12 per unit. Price and cost ($ per unit) 100 112 12 0 P 100 0.5Q Quantity LMC = LAC 200 If the firm can practice first-degree price discrimination, it can make a maximum profit of .............. a) $1,872 b) $1,936 c) $7,744 d) $9,856 e) None of the above.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 1.4CE
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A firm faces the demand for its product (P = 100 - 0.5Q) as shown in the figure below. It produces under conditions of constant costs in the long run, and LMC = LAC = $12 per unit. Price and cost ($ per unit) 100 112 12 0 P 100 0.5Q Quantity LMC = LAC 200 If the firm can practice first-degree price discrimination, it can make a maximum profit of .............. a) $1,872 b) $1,936 c) $7,744 d) $9,856 e) None of the above.
Transcribed Image Text:A firm faces the demand for its product (P = 100 - 0.5Q) as shown in the figure below. It produces under conditions of constant costs in the long run, and LMC = LAC = $12 per unit. Price and cost ($ per unit) 100 112 12 0 P 100 0.5Q Quantity LMC = LAC 200 If the firm can practice first-degree price discrimination, it can make a maximum profit of .............. a) $1,872 b) $1,936 c) $7,744 d) $9,856 e) None of the above.
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