3 The inverse demand for Harley Davidsonmotorcycles is given by:P = 40,000-1OQwhere Pis the price in dollars, and Q measuresthe number of units sold each month. HarleyDavidson is currently producing motorcycles at aconstant marginal and average cost of $16,000.Assume Harley Davidson is a monopoly.Heavy tariffs on imported steel drive up Harley'smarginal and average cost by $2,000. What isthe new profit-maximizing quantity?

The profit is maximized where the MR=MC.

Answered: The inverse demand for Harley Davidson…

The inverse demand for Harley Davidson motorcycles is given by: P = 40,000-10Q where Pis the price in dollars, and Q measure the number of units sold each month. Harley

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 29CTQ: Imagine that you ale managing a small firm and thinking about entering the market of a monopolist....

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Question

The inverse demand for Harley Davidson
motorcycles is given by:
P = 40,000-1OQ
where Pis the price in dollars, and Q measures
the number of units sold each month. Harley
Davidson is currently producing motorcycles at a
constant marginal and average cost of $16,000.
Assume Harley Davidson is a monopoly.
Heavy tariffs on imported steel drive up Harley's
marginal and average cost by $2,000. What is
the new profit-maximizing quantity?

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