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The Following Demand Curve Has Been Estimated for a Monopoly

Question 61

Essay

The following demand curve has been estimated for a monopoly firm:
Q = 6680 - 0.4P
where Q is the quantity sold per month and P is the price charged by the firm.
The firm has the following total cost function:
TC = 200,000 + 2000Q - 5.5Q2 + 2Q3
At what price and quantity will the firm maximize profits?

Correct Answer:

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Profit is maximized where MR = MC
MC = d...

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