A certain monopoly has a marginal cost that depends on the quantity produced. The marginal cost...

A certain monopoly has a marginal cost that depends on the quantity produced. The marginal cost is MC = 4Q
The marginal revenue curve is: MR = 40 – 4Q
The demand curve is: D = 40 - 2Q

Fixed cost of production $10, variable cost is $5 per unit produced.

a) Graph the MR, MC and demand curves!
b) Which quantity the monopoly will produce at which price?
c) Calculate the profit!

Expert Solution

Part a) Graph is depicted in the image.

Part b) quantity = 5

Price = 30

Part c) profits = TR - TC

= ( Price × quantity) - (fixed cost + variable Costs)

= 30×5 - (10+5).

= 150 - 15

= 135$

Rahul Sunny answered 2 years ago

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