Consider the single seller of diamonds where the demand curve and the marginal revenue curve are described as follows: P = 10,000 – Q and MR = 10,000 – 2Q. The quantity Q refers to the number of diamonds sold each week. The marginal cost of producing diamonds is constant at $4,000 each. (MC=2000). You do not need to draw a graph..a.Calculate the profit-maximizing number of diamonds sold each week by this monopolistShow your work. Q = ___________. b.Calculate the price that the monopolist will charge for each diamond sold. P =_________. c.Finally, calculate the total profit earned by this monopolist if Total Costs = 1,000,000+4,000Q. Show your work!

Answered: Consider the single seller of diamonds…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 10PA

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Consider the single seller of diamonds where the demand curve and the marginal revenue curve are described as follows: P = 10,000 – Q and MR = 10,000 – 2Q. The quantity Q refers to the number of diamonds sold each week. The marginal cost of producing diamonds is constant at $4,000 each. (MC=2000). You do not need to draw a graph.

Calculate the profit-maximizing number of diamonds sold each week by this monopolist

Show your work.

Q = ___________.

Calculate the price that the monopolist will charge for each diamond sold. P =_________.

Finally, calculate the total profit earned by this monopolist if Total Costs = 1,000,000+4,000Q. Show your work!

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