Assume a monopolist faces a market demand curve
P = 190
- 3Q and has the
short-run total cost function C
= 540
+ 10Q. What is the
profit-maximizing level of output? What are profits? Graph the
marginal revenue, marginal cost, and demand curves, and show the
area that represents deadweight loss on the graph. (Hint: derive
the MR and MC functions and set MC=MR and solve).
In Question 3 above, what would price and output be if the firm...