For a monopolist firm the demand and the total cost functions are given as Q = 20- 0.5P and TC= 4Q2-8Q+15, respectively. (8 marks) Find a) the optimum quantity and the optimum price level and the profit/loss on these levels b) at what price should the monopolist shut down? c) Show the economic profit (loss) of the firm in a graphic representation

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A: Part a) Total revenue in market 1 = 80Q1 - 2.5 Q12  Marginal revenue in market 1 = ∆TR / ∆ Q1…

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A: P =120-QMC=60TC=60QNow,TR= P x Q     =(120-Q) x Q…

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A: p1=100-Q1  ⇒Q1=100-p1 p2=120-3Q2  ⇒3Q2=120-p2  ⇒Q2=40-13p2 C(Q)=12Q2  where Q=Q1+Q2

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A:

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A: TC = 2500 + 50Q+0.5Q2MC = ∆TC∆QMC = 0.5 + 2(0.5) QMC = 50 + Q.............(equation1)   Q = 50-0.25P…

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