A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q2. By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. If the firm's profitmaximizing output level is 5 and its profit maximizing price is $15, what are its monopoly profits at this price and quantity?
a. $25
b. $50
c. $75
d. $100
Ans: b. $50
Economics
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