Scenario 10.2:
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost curve for its product:
Q = 200 - 2P
MR = 100 - Q
TC = 5Q
MC = 5
-Refer to Scenario 10.2. What level of output maximizes total revenue?

Question

Quizplus · Accepted Answer

Total revenue is maximized where marginal revenue (MR) equals zero. Setting MR = 0 gives 0 = 100 - Q, solving for Q gives Q = 100.

Scenario 10.2: A Monopolist Faces the Following Demand Curve, Marginal Revenue Curve