A monopolist faces market demand given by P = 220

Question

A monopolist faces market demand given by P = 220 - 5Q.For this market,MR = 200 - 10Q and MC = 10Q.What quantity of output will the monopolist produce in order to maximize profits

Quizplus · Accepted Answer

To maximize profits, a monopolist sets marginal revenue (MR) equal to marginal cost (MC). Given MR = 200 - 10Q and MC = 10Q, setting them equal gives 200 - 10Q = 10Q. Solving for Q gives Q = 10.