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Afirms inverse demand function is P = 200 - 100. Its marginal cost and average total cost are constant at $40. What price wi
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Answer #1

The price will be composed of the consumer surplus and the expenditure incurred on selling the quantity determined by P = MC condition

200 - 10Q = 40

Q = 16 units

CS = 0.5*(200-40)*16 = 1280

Expenditure = 16*40 = 640

Price of the block of 16 units = 1280+640 = 1920

Select 1920.

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