-Suppose a monopolist has TC = 40 + 10Q + Q²,and the demand curve it faces is p = 130 - 2Q.What is the monopolist's total cost (TC) at the profit-maximizing level of output?

Question

-Suppose a monopolist has TC = 40 + 10Q + Q<sup>2</sup>,and the demand curve it faces is p = 130 - 2Q.What is the monopolist's total cost (TC) at the profit-maximizing level of output? A) TC = 320 B) TC = 640 C) TC = 720 D) TC = 840

Quizplus · Accepted Answer

To find the profit-maximizing output, set MR = MC. First, find MR by differentiating TR = P*Q = (130 - 2Q)Q = 130Q - 2Q^2, giving MR = 130 - 4Q. MC is the derivative of TC, which is 10 + 2Q. Set MR = MC: 130 - 4Q = 10 + 2Q, solving gives Q = 20. Substitute Q = 20 into TC = 40 + 10Q + Q^2 to get TC = 640.

-Suppose a Monopolist Has TC = 40 + 10Q