A Monopolist's Demand Function Is P = 1624 - 4Q,and

question 20

Essay

A monopolist's demand function is P = 1624 - 4Q,and its total cost function is
TC = 22,000 + 24Q -4Q² + 1/3 Q³,where Q is output produced and sold.
a.At what level of output and sales (Q)and price (P)will total profits be maximized?
b.At what level of output and sales (Q)and price (P)will total revenue be maximized?
c.At what price (P)should the monopolist shut down?

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Definitions:

State of Nature

The actual condition or reality of a situation which decision makers do not control and must consider in their planning.

Decision Nodes

Points within a decision tree at which choices are available, representing different paths that can be taken.

Alternative

A course of action or strategy that may be chosen by a decision maker.

Uncertainty

Uncertainty pertains to the degree of unknown aspects in situations, events, or outcomes, often quantified in risk assessments and decision-making processes.