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    Question

    A company using first-degree price discrimination has a

    demand curve given by P=100−2Q. If the marginal cost of production is $10 per unit, what is the total revenue if the company sells 20 units?
    A $1,200 Correct Answer Incorrect Answer
    B $1,400 Correct Answer Incorrect Answer
    C $1,600 Correct Answer Incorrect Answer
    D $1,800 Correct Answer Incorrect Answer

    Solution

      Some students will find the price, P = 100-2(20) = 60 and then find TR= PQ = 60*20 = 1200. This is wrong. In the first-degree price discrimination, we need to find TR through integration of demand function.

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