A Monopolist Faces a Demand Function Given by P =

question 108

Essay

A monopolist faces a demand function given by P = 100 - Q and a corresponding marginal revenue function of MR = 100 - 2Q. The average and marginal costs of production are constant at $20.
a.
How many units of output does the monopolist produce if setting a single price?
b.
Suppose that the monopolist practices perfect price discrimination. How many units of output will the monopolist now produce?

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