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QUESTION

Suppose the demand curve is p=10-BQ, where P is the market price and Q is the quantity demanded and B0. A monopoly firm has constant marginal costs...

Suppose the demand curve is p=10-BQ, where P is the market price and Q is the quantity demanded and B>0. A monopoly firm has constant marginal costs C greater than zero and less than 5. The monopoly price is :

A. Greater than 5

B. 5

C. Less than 5

D. Uncertain

Answer is A. Why?

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