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 profit will she make?

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 profit will she make?

Quizplus · Accepted Answer

To find the profit, we need to calculate the total revenue (TR), total cost (TC), and then subtract TC from TR. We can use the total revenue equation to find TR: 
TR = 40Q - 0.25
TR = 40(160-4P) - 0.25
TR = 6400 - 160P - 0.25

To find TC, we can use the total cost equation:
TC = 4Q
TC = 4(160-4P)
TC = 640 - 16P

Now we can find the profit:
Profit = TR - TC
Profit = (6400 - 160P - 0.25) - (640 - 16P)
Profit = 5760 - 144P

To find the profit-maximizing level of output, we can set marginal revenue equal to marginal cost:
MR = MC
40 - 0.5Q = 4
Q = 72

So the profit-maximizing price and quantity are P = $22 and Q = 72. Plug in these values to the profit equation:
Profit = 5760 - 144($22)
Profit = $1,296

Therefore, the answer is C.

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