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Scenario: Monopolist
The demand curve for a monopolist is P = 75 - 0.5Q, and the monopolist has the following MC expressed as P = 2Q. Assume also that ATC at the profit-maximizing level of production is equal to $12.50.
-(Scenario: Monopolist) Look at the scenario Monopolist. The MR curve is:
A) P = 150 - 0.5Q.
B) P = 75 - Q.
C) P = 150 - Q.
D) P = 225 - Q.

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Quizplus · Accepted Answer

For a monopolist, the marginal revenue (MR) curve has the same intercept as the demand curve but twice the slope. Therefore, if the demand curve is P = 75 - 0.5Q, the MR curve is P = 75 - Q.

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