A monopolist faces the inverse demand curve p = 64

Name: A monopolist faces the inverse demand curve p = 64 - 2q. At what level of output is his total revenue maximized?
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Question

A monopolist faces the inverse demand curve p = 64 - 2q. At what level of output is his total revenue maximized?

Quizplus · Accepted Answer

Total revenue is maximized when marginal revenue is zero. The marginal revenue curve has the same intercept as the demand curve but twice the slope. Thus, MR = 64 - 4q. Setting MR = 0 gives q = 16.