32. Refer to Figure 13. How could the consumer reach point E? a. The price of good X would have to increase by more than income increases. b. The price of good Y would have to decrease by less than income decreases. c. The price of both good X and Y would have to decrease by the same proportion. d. The price of good X would have to increase by more than the price of good Y. 33. If a producer knows their product is an inferior good and if they know average house income is falling, what would the producer do? a. increase output because the demand for their product would rise. b. close down, because inferior goods are the first to be eliminated from household budgets when income falls. c. keep their output the same. d. decrease output because the demand for their product would fall. PageScenario 9 A monopolist faces market demand given by P = 80 - Q and market supply is given by P = 20 + 2Q. For this market, MR = 80 - 2Q and MC = 40 = ATC. 34. Refer to Scenario 9. What is the monopolist's profit? a. $100 b. $400 C. $200 d. $300 35. Refer to Scenario 9. If the monopolist perfectly price discriminates, what is the value of consumer surplus? a. $0 b. $200 C. $100 d. $400 36. Refer to Scenario 9. What is the value of deadweight loss due to the monopoly (with no price discrimination)? a. $100 b. $70 C. $140 d. $200 37. Refer to Scenario 9. Now suppose instead that the market is served by a duopoly. If firms collude, how much will each firm produce? Use any results you calculated from the previous questions if you think they are appropriate. a. 7 b. 10 C. 5 d. 12 38. Refer to Scenario 9. Again, suppose instead that the market is served by a duopoly. The firms collude, but Firm A decides to deviate from the cartel agreement and produces 5 more units than initially agreed upon. What are the profits of Firm A and B now? a. Firm A = $150, Firm B = $150 b. Firm A = $300, Firm B = $200 c. Firm A = $225, Firm B = $150 d. Firm A = $200, Firm B = $200 Page 13 of