SCENARIO: HOME MONOPOLIST
A monopolist faces a demand curve given by P = 60 -2Q and has total
Costs given by TC = Q2.Its marginal revenue is MR = 60 - 4Q and its
Marginal cost is MC = 2Q.
Reference: Ref 95
(Scenario: Home Monopolist) In autarky, what is the firm's equilibrium
Output?

Question

SCENARIO: HOME MONOPOLIST
A monopolist faces a demand curve given by P = 60 -2Q and has total
Costs given by TC = Q2.Its marginal revenue is MR = 60 - 4Q and its
Marginal cost is MC = 2Q.
Reference: Ref 9­5
(Scenario: Home Monopolist) In autarky, what is the firm's equilibrium
Output?

Quizplus · Accepted Answer

The monopolist maximizes profit by producing where MR = MC. 
60 - 4Q = 2Q
Solving for Q, we get Q = 10. Therefore, the firm's equilibrium output is 10.

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