Suppose you own a firm that produces widgets and is a monopoly. The market demand is given by the equation P = 50 - 2Q, where P is the price of gadgets and Q is the quantity of gadgets sold per week. The marginal cost for the firm is 6Q. What is the single price monopoly output and price?
What will be an ideal response?
MR = 50 - 4Q; MC = 6Q so 50 - 4Q = 6Q and Q = 5 so Price = 40
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