Consider a monopolist who produces a good at zero cost and faces the following inverse demand function: Q< 120, Q > 120, 300 – Q, P = 540 – 3Q, where Pand Q denote price and quantity respectively. In what follows, round your answers to three decimal places if necessary. Monopolist's profit is maximised at P = 210 Q = 90
Consider a monopolist who produces a good at zero cost and faces the following inverse demand function: Q< 120, Q > 120, 300 – Q, P = 540 – 3Q, where Pand Q denote price and quantity respectively. In what follows, round your answers to three decimal places if necessary. Monopolist's profit is maximised at P = 210 Q = 90
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.9P
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Transcribed Image Text:Consider a monopolist who produces a good at zero cost and faces the following inverse demand function:
Q< 120,
Q> 120,
| 300
Q,
P =
540 – 3Q,
where P and Q denote price and quantity respectively. In what follows, round your answers to three decimal places if necessary.
Monopolist's profit is maximised at
P
210
Q
90
Suppose everything is the same as in part (a) except the inverse demand function – where the inequalities have just switched places. The new inverse demand function is
300 – Q,
Q > 120,
P =
540 – 3Q,
Q< 120.
Monopolist's profit is maximised at
270
Q
90
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