A monopolist has the following production function Q-L050s where Lis the number of units of labour and K is the number of units of capital used in the production process. Suppose that the cost per unit of labour is $4 and the cost per unit of capital is $16 and the monopolist takes the input prices as given. Assume the market demand is P-24-Q If the monopolist is going to maximise the profit, how much output will they produce? How many units of labour and capital is the firm going to employ? How much profit is the firm going to earn?

A monopolist has the following production function Q-L050s where Lis the number of units of labour and K is the number of units of capital used in the production process. Suppose that the cost per unit of labour is $4 and the cost per unit of capital is $16 and the monopolist takes the input prices as given. Assume the market demand is P-24-Q If the monopolist is going to maximise the profit, how much output will they produce? How many units of labour and capital is the firm going to employ? How much profit is the firm going to earn?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.9P

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Now suppose that the monopolist chooses q to maximise its profit. The consumer surplus at this profit maximising quantity would be?