A monopolist faces a market demand curve given by Q = 70 – P. The Monopolist’s marginal revenue function is given by: MR = 70 - 2Q. a. If the monopolist can produce at constant average and marginal costs of AC = MC = 6, i. What output level will the monopolist choose in order to maximize profits? ii. What is the price at this output level? iii. What are the monopolist’s profits? Show all working and draw graph

A monopolist faces a market demand curve given by Q = 70 – P. The Monopolist’s marginal revenue function is given by: MR = 70 - 2Q. a. If the monopolist can produce at constant average and marginal costs of AC = MC = 6, i. What output level will the monopolist choose in order to maximize profits? ii. What is the price at this output level? iii. What are the monopolist’s profits? Show all working and draw graph

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter25: Monopoly

Section: Chapter Questions

Problem 14E

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