Scenario 10.1:
Barbara is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue curve and total cost curve are given as follows:
Q = 160 - 4P TR = 40Q - 0.25 MR = 40 - 0.5Q TC = 4Q MC = 4
-Refer to Scenario 10.1. How much output will Barbara produce?

Question

Scenario 10.1:
Barbara is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue curve and total cost curve are given as follows:
Q = 160 - 4P TR = 40Q - 0.25  MR = 40 - 0.5Q TC = 4Q MC = 4
-Refer to Scenario 10.1. How much output will Barbara produce?

Quizplus · Accepted Answer

To determine the profit-maximizing quantity, we need to find where MR=MC.
From the given information, we know that:
MR = 40 - 0.5Q
MC = 4

Setting MR=MC:
40 - 0.5Q = 4
36 = 0.5Q
Q = 72

Therefore, Barbara will produce 72 units of output.

Scenario 10.1: Barbara Is a Producer in a Monopoly Industry. Her Demand