20Q, where C is the total cost, F is a fixed cost, and Q is the level of output. The inverse demand function is P = 60 - Q, where P is the price in the market. The fir earn zero economic profit when it charges a price of 30 (this is not the price that maximizes profit). How much profit does the firm earn when it charges the price th maximizes profit?

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter8: Monopoly
Section: Chapter Questions
Problem 7SQP
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11.10. Assume that a monopolist sells a product with the cost function C = F +
20Q, where C is the total cost, F is a fixed cost, and Q is the level of output. The
inverse demand function is P = 60 - Q, where P is the price in the market. The firm will
earn zero economic profit when it charges a price of 30 (this is not the price that
maximizes profit). How much profit does the firm earn when it charges the price that
maximizes profit?
Transcribed Image Text:11.10. Assume that a monopolist sells a product with the cost function C = F + 20Q, where C is the total cost, F is a fixed cost, and Q is the level of output. The inverse demand function is P = 60 - Q, where P is the price in the market. The firm will earn zero economic profit when it charges a price of 30 (this is not the price that maximizes profit). How much profit does the firm earn when it charges the price that maximizes profit?
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