A monopolist has demand and cost curves given by:
QD = 1000 - 2P
TC = 5,000 + 50Q
a. Find the monopolist's profit-maximizing quantity and price.
b. Find the monopolist's profit.
a. MR = 500 - Q
MC = 50
50 = 500 - Q
Q* = 450
P* = $275
b. Profit = 275 ? 450 - 5,000 - 50 ? 450 = $96,250
Economics
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