A monopolist faces the following market demand function: D(P) 100 P and has total costs equal to TC(Q) = 100 + 100 Show that the monopolist's cost function is subadditive for all relevant levels of demand (for all Q< 100). (Hint: Let E Qi = Q be a way to split up the total production of quantity Q in N different firms. You can then use the fact that the minimum of N Q? is reached at Qi = 8.)

A monopolist faces the following market demand function: D(P) 100 P and has total costs equal to TC(Q) = 100 + 100 Show that the monopolist's cost function is subadditive for all relevant levels of demand (for all Q< 100). (Hint: Let E Qi = Q be a way to split up the total production of quantity Q in N different firms. You can then use the fact that the minimum of N Q? is reached at Qi = 8.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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