Suppose a monopolist has TC = 100 + 10Q + 2Q2, and the demand curve it faces is p = 90 - 2Q. What will be the price, quantity, and profit for this firm?

What will be an ideal response?


First, determine MR = 90 - 4Q. Second, MC = 10 + 4Q. Setting MR = MC yields 90 - 4Q = 10 + 4Q. Rearranging yields 80 = 8Q or Q = 10. Price equals 90 - 2(10 ) = 70. Total revenue = 70 ? 10 = 700. Total cost equals 100 + 10(10 ) + 2(102 ) = 400. Profit equals 700 - 400 = 300.

Economics

You might also like to view...

If the currency drain ratio is zero, which of the following situations leads to the greatest total increase in the quantity of money?

A) an increase in the monetary base of $250,000 when the desired reserve ratio is 15 percent B) an increase in the monetary base of $100,000 when the desired reserve ratio is 5 percent C) an increase in the monetary base of $120,000 when the desired reserve ratio is 10 percent D) an increase in the monetary base of $100,000 when the desired reserve ratio is 50 percent E) an increase in the monetary base of $200,000 when the desired reserve ratio is 20 percent

Economics

If the present value equation used to calculate the price of a stock you are considering buying is "[$12 / (0.05 - 0.02)]," which of the following is correct, assuming that dividends will grow at a constant rate?

A) The dividend is $12 per share, the dividend growth rate is 5 percent, and the interest rate is 2 percent. B) The dividend is $12 per share, the dividend growth rate is 2 percent, and the interest rate is 5 percent. C) The stock price is $12, the dividend growth rate is 5 percent, and the interest rate is 3 percent. D) The stock price is $12, the dividend growth rate is 2 percent, and the interest rate is 5 percent.

Economics

People who failed to look for a job are classified as

a. unemployed. b. underemployed. c. out of the labor force. d. part time employed.

Economics

Of the following high-income countries, which has the highest life expectancy at birth?

A) Canada B) Japan C) the United Kingdom D) the United States

Economics