A monopolist seller of Irish ceramics faces the following demand function for its product: P = 62 - 3Q.The fixed cost is $10 and the variable cost per unit is $2.What is the maximizing QUANTITY for this monopoly? Hint: MR is twice as steep as the inverse demand curve: MR = 62 - 6 Q.(Pick closest answer)
A) Q = 10
B) Q = 15
C) Q = 22
D) Q = 37
E) Q = 41

Question

Quizplus · Accepted Answer

To find the profit-maximizing quantity for the monopoly, we first need to equate the marginal revenue (MR) to the marginal cost (MC). Given MR = 62 - 6Q and the variable cost per unit is $2 (which is the MC since fixed costs do not affect marginal costs), we set MR = MC: 62 - 6Q = 2. Solving for Q gives Q = 10.

A Monopolist Seller of Irish Ceramics Faces the Following Demand