You are the manager of a monopoly that faces a demand curve described by P = 10 − 2Q.Your costs are C = 20 + 2Q.The revenue-maximizing output is:
A) 1.5.
B) 3.
C) 4.
D) None of the preceding answers is correct.

Question

Quizplus · Accepted Answer

Revenue maximization occurs where marginal revenue (MR) equals marginal cost (MC). However, the given information does not allow for the calculation of the revenue-maximizing output directly without first deriving the MR from the demand curve and equating it to MC. The provided options do not match the outcome of such a calculation, indicating a need for further calculation or information not provided in the options.

You Are the Manager of a Monopoly That Faces a Demand