A monopoly operates according to the following inverse demand function and total cost function where Q is output and P is the price in dollars.               P = 50 – 0.50Q                   Inverse Demand Function               TC = 20Q                           Total Cost Function Suppose that the monopoly sets price and output based on a two-part pricing strategy. Calculate the amount of output exchanged. Calculate the cost of the lump-sum access fee.

Survey Of Economics
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ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter8: Monopoly
Section: Chapter Questions
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A monopoly operates according to the following inverse demand function and total cost function where Q is output and P is the price in dollars.

              P = 50 – 0.50Q                   Inverse Demand Function

              TC = 20Q                           Total Cost Function

Suppose that the monopoly sets price and output based on a two-part pricing strategy.

  1. Calculate the amount of output exchanged.
  2. Calculate the cost of the lump-sum access fee.
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