Suppose a firm is a monopolist in its output market and a perfect competitor in its input market.The demand for its output is
.The firm's production is given by and the market wage is $50.The marginal revenue to the monopolist is

Question

Suppose a firm is a monopolist in its output market and a perfect competitor in its input market.The demand for its output is

.The firm's production is given by Suppose a firm is a monopolist in its output market and a perfect competitor in its input market.The demand for its output is<sub> </sub> <sub> </sub> .The firm's production is given by and the market wage is $50.The marginal revenue to the monopolist is A) B) C) D)

and the market wage is $50.The marginal revenue to the monopolist is

Quizplus · Accepted Answer

To find the monopolist's marginal revenue, we need to first find the monopolist's demand curve. We can use the inverse demand equation, which is given as P = 100 - Q, where P is the price of the output and Q is the quantity of the output.

To find the monopolist's optimal output, we need to set the marginal cost equal to the marginal revenue. The monopolist's production function is Q = KL, so the marginal cost is the wage rate (which is $50 in this case) divided by the marginal product of labor (which is 2K). Therefore, the monopolist's marginal cost is $25/K.