SCENARIO: A MONOPOLIST
A monopolist faces a demand curve given by P = 20 - Q and has total
Costs given by TC = Q2.By using a bit of calculus, you should be able
To determine that the firm's marginal revenue is MR = 20 - 2Q and its
Marginal cost is MC = 2Q.
Reference: Ref 91
(Scenario: A Monopolist) What is its profitmaximizing output level?

Question

SCENARIO: A MONOPOLIST
A monopolist faces a demand curve given by P = 20 - Q and has total
Costs given by TC = Q2.By using a bit of calculus, you should be able
To determine that the firm's marginal revenue is MR = 20 - 2Q and its
Marginal cost is MC = 2Q.
Reference: Ref 9­1
(Scenario: A Monopolist) What is its profit­maximizing output level?

Quizplus · Accepted Answer

The profit-maximizing output level for a monopolist is where marginal revenue (MR) equals marginal cost (MC). Setting MR = MC gives 20 - 2Q = 2Q, solving for Q gives Q = 5.

SCENARIO: a MONOPOLIST A Monopolist Faces a Demand Curve Given by P =