A monopolist faces an inverse demand curve $P = 300 - 6 Q$ and has a constant marginal cost of 20. The monopolist's profit-maximizing output is:

Question

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To find the profit-maximizing output for a monopolist, we first determine the marginal revenue (MR) and set it equal to the marginal cost (MC). The inverse demand curve is $P = 300 - 6Q$. To find MR, we double the slope of the demand curve, resulting in $MR = 300 - 12Q$. Setting MR equal to MC ($20$) and solving for $Q$ gives us $300 - 12Q = 20$, which simplifies to $280 = 12Q$, and $Q = 23.33$.

A Monopolist Faces an Inverse Demand Curve P=300−6QP = 300 - 6 QP=300−6Q

A Monopolist Faces an Inverse Demand Curve $P = 300 - 6 Q$