Consider the single seller of diamonds where the demand curve and the marginal revenue curve are described as follows: P = 10,000 – Q and MR = 10,000 – 2Q. The quantity Q refers to the number of diamonds sold each week. The marginal cost of producing diamonds is constant at $4,000 each. (MC=2000). You do not need to draw a graph..a.Calculate the profit-maximizing number of diamonds sold each week by this monopolistShow your work. Q = ___________. b.Calculate the price that the monopolist will charge for each diamond sold. P =_________. c.Finally, calculate the total profit earned by this monopolist if Total Costs = 1,000,000+4,000Q. Show your work!

Answered: Consider the single seller of diamonds…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the single seller of diamonds where the demand curve and the marginal revenue curve are described as follows: P = 10,000 – Q and MR = 10,000 – 2Q. The quantity Q refers to the number of diamonds sold each week. The marginal cost of producing diamonds is constant at $4,000 each. (MC=2000). You do not need to draw a graph.

Calculate the profit-maximizing number of diamonds sold each week by this monopolist

Show your work.

Q = ___________.

Calculate the price that the monopolist will charge for each diamond sold. P =_________.

Finally, calculate the total profit earned by this monopolist if Total Costs = 1,000,000+4,000Q. Show your work!

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