Unformatted text preview: residual demand curve given by P = 50 ‐ 4Q. While the entrant does not know the inverse market demand it does know that the incumbent committed to producing 150 units. Using this information, which of the following equations best summarizes the inverse market demand curve? A. P = 200 ‐ 4Q. B. P = 200 ‐ Q. C. P = 150 ‐ 4Q. D. None of the statements associated with this question are correct. 29. A network linking 6 users is typically A. less likely to exhibit bottlenecks than a network linking 2 users. B. three times as valuable as a network linking 2 users. C. more than three times as valuable as a network linking 2 users. D. less than three times as valuable as a network linking 2 users. 7 30. Consider a monopolist attempting to engage in limit pricing with total costs, C(Q) = 100 + 2Q. The market (inverse) demand for its product is P =100 ‐ 2Q. Currently, monopolist produces 30 units of output. Assuming the potential entrant has the same cost structure as the incumbent monopolist, is it profitabl...
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- Fall '12