Question

Suppose the Malfunctioning Eddie's Rocket Car Emporium has market power in car sales. It has the...

Suppose the Malfunctioning Eddie's Rocket Car Emporium has market power in car sales. It has the inverse demand curve of P = 90 – 1.5Q and marginal cost curve MC = 10 + Q. If Malfunctioning Eddie decides to practice perfect price discrimination, its profit-maximizing output level will:

decrease from 24 to 12 units.

increase from 14 to 28 units.

decrease from 28 to 14 units.

increase from 20 to 32 units.

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