Suppose the demand curve for a monopolist is QD = 400 - P, and the marginal revenue function is MR = 400 - 2Q. The monopolist has a constant marginal and average total cost of $40 per unit. a. Find the monopolist's profit-maximizing output and price. Show on a graph. b. Calculate the monopolist's profit.

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter25: Monopoly
Section: Chapter Questions
Problem 14E
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Suppose the demand curve for a monopolist is QD = 400 - P, and the marginal revenue function is MR = 400 - 2Q. The monopolist has a constant marginal and average total cost of $40 per unit.

a. Find the monopolist's profit-maximizing output and price. Show on a graph.

b. Calculate the monopolist's profit.

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