Suppose that a monopolist's inverse demand curve can be expressed as:
P = 20,000 - Q2
The monopolist's total cost curve is:
TC = 8,000Q
a. Use calculus to determine the monopolist's marginal revenue curve.
b. Use calculus to determine the monopolist's marginal cost curve.
c. What is monopolist's profit-maximizing level of output?
d. What price should the monopolist charge to maximize its profit?
Correct Answer:
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R = PQ = (20,000 - Q2)Q = ...
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