A Monopolist Faces a Demand Curve Q = 120 -

question 73

Essay

A monopolist faces a demand curve Q = 120 - 2p and has costs given by C(Q)= 20Q + 100.
a.Write the monopolist's profits in terms of the price it charges.
b.Use the derivative (w.r.t.price)to determine the monopolist's profit-maximizing price.
c.Now,derive the monopolist's inverse demand based on the demand equation above.Write out the monopolist's profits in terms of quantity.
d.Use the derivative w.r.t.Q to determine the monopolist's optimal quantity.What price does the monopoly charge?

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