Firm D is a monopolist that faces a market with inverse demand given by: P = 120-4Q Where Q is Firm D's output level. Firm D's total cost function is given by: TC(Q)= 11Q +42 Assuming that Firm D can perfectly (1st degree) price discriminate, what is Firm D's profit maximizing output level, Q (Hint: Because Firm D can perfectly price discriminate, its Marginal Revenue function is equivalent to inverse demand

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter8: Monopoly
Section: Chapter Questions
Problem 7SQP
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Question 8
Firm D is a monopolist that faces a market with inverse demand given by:
P = 120-4Q
Where Q is Firm D's output level.
Firm D's total cost function is given by:
TC(Q) = 11Q +42
Assuming that Firm D can perfectly (1st degree) price discriminate, what is Firm D's profit maximizing output level, Q*?
(Hint: Because Firm D can perfectly price discriminate, its Marginal Revenue function is equivalent to inverse demand).
Transcribed Image Text:Question 8 Firm D is a monopolist that faces a market with inverse demand given by: P = 120-4Q Where Q is Firm D's output level. Firm D's total cost function is given by: TC(Q) = 11Q +42 Assuming that Firm D can perfectly (1st degree) price discriminate, what is Firm D's profit maximizing output level, Q*? (Hint: Because Firm D can perfectly price discriminate, its Marginal Revenue function is equivalent to inverse demand).
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