Question

In: Economics

I. Suppose the inverse demand function for a monopolist’s product is given by ? = 150...

I. Suppose the inverse demand function for a monopolist’s product is given by ? = 150 − 2? and the total cost function is given by ?? = 100 + 30?

1. Determine the profit-maximizing price and quantity

2. Determine the maximum profits

II. Suppose the inverse demand function for a monopolistically competitive firm’s product is given by

? = 100 − 2?
and the cost function is given by ?? = 52 + 4?

1. Determine the profit-maximizing price and quantity

2. Determine the maximum profits.

Solutions

Expert Solution

Ans.1) the monopolist firm's profit-maximizing price is $90, the profit-maximizing quantity is 30 units, and the maximum profit is $1,700.

2) the monopolistically competitive firm's profit-maximizing price is $52, the profit-maximizing quantity is 24 units, and the maximum profit is $1,100.

Rahul Sunny answered 6 months ago
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