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In: Economics

Assume mark is a monopoly producer of illegal substances in his hometown. He faces a demand...

Assume mark is a monopoly producer of illegal substances in his hometown. He faces a demand for these substances represented by the demand function Q=150-3p .

TR=50q-1/3q^2

MR=50-2/3q

Marginal cost function is 1/3q+5 so profit max Q =45

(please check to see if TR MR and PM are correct) and also answer Is it reasonable to assume that mark would be a monopoly producer of illegal substances ....What does theory tell us about why he may be the only producer?

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Expert Solution

Rahul Sunny answered 2 years ago
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