A monopolist has total cost TC = .1Q² - 2Q + 100 and marginal cost MC = .2Q - 2. Market demand is Q = 86 - P,implying that the firm's marginal revenue is MR = 86 - 2Q. Its profit-maximizing output is

Question

Quizplus · Accepted Answer

To maximize profit, a monopolist produces where marginal revenue equals marginal cost.
Setting MR=MC, we get:
86-2Q = .2Q-2
Solving for Q, we get:
Q=40
Therefore, the profit-maximizing output is 40.

A Monopolist Has Total Cost TC =