In a market with the inverse demand curve P  10  Q, Brand X is a monopolist with no fixed costs and with a marginal cost of $2.If marginal cost rises to $4, by how much will the price of Brand X rise?

A) $2.
B) $1.
C) $3.
D) $0; the firm is already charging the monopoly price.
E) None of the above.

To find the monopoly price, we need to set marginal revenue equal to marginal cost. The marginal revenue for a monopolist is given by the derivative of the inverse demand curve.

MR = d/dQ (P) = d/dQ (10 - Q) = 10 - 2Q

Setting MR = MC:

10 - 2Q = 2

Q = 4

So, the monopoly price is P = 10 - 4 = $6.

If the marginal cost increases to $4, the monopoly price will increase. The new equilibrium quantity is found by setting the new marginal cost equal to the new marginal revenue:

10 - 2Q = 4

Q = 3

The new monopoly price is P = 10 - 3 = $7. So, the price of Brand X will rise by $1. Thus, the correct answer is (B).