A monopolist with constant average and marginal cost equal to 8 (AC = MC = 8)faces demand Q = 100 - P,implying that its marginal revenue is MR = 100 - 2Q. Its profit maximizing quantity is
A)8
B)46
C)50
D)92

Question

Quizplus · Accepted Answer

To find the profit-maximizing quantity for a monopolist, set MR = MC. Given MR = 100 - 2Q and MC = 8, we solve for Q: 100 - 2Q = 8, which simplifies to 2Q = 92, and thus Q = 46.

A Monopolist with Constant Average and Marginal Cost Equal to 8