Scenario 3- Each potential customer for a firmhas a demand curve of P = 20 – 2Q and thefirm has a constant marginal cost of $4 (it maybe helpful if you graph the Demand and MCcurves where Demand has vertical interceptof $20 and horizontal intercept of q = 10units.)Q31 (Using Scenario 3) If the firm chargescustomers a flat rate of $4 per unit, BUTbefore being able to buy at $4 per unitcustomers must pay a lump sum membershipfee, which of the following is the maximumamount customers would be willing to pay forthe membership fee?A $36B $49C $64D $81

Answer: Option C ($64) Explanation: The maximum membership fee at a price of $4 will be equal to the…

Answered: Scenario 3- Each potential customer for…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 6SCQ: A firms marginal cost curve above the average variable cost curve is equal to the films individual...

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