Question

The market demand for peanuts is given by P = 30 - 0.4Q. Weaver is the only supplier of peanuts in the market and they have total fixed costs of $100 and constant marginal costs of $2 per unit. The monopolist's profit-maximizing choice of quantity is _____ units and the profit-maximizing choice of price is $ ______ .

Answer 1

Answer: The monopolist's profit-maximizing choice of quantity is 35 units and the profit-maximizing choice of price is $ 16.

Quantity	Price	Total cost	Revenue	Profit
0	30	100	0	-100
1	29.6	102	29.6	-72.4
2	29.2	104	58.4	-45.6
3	28.8	106	86.4	-19.6
4	28.4	108	113.6	5.6
5	28	110	140	30
6	27.6	112	165.6	53.6
7	27.2	114	190.4	76.4
8	26.8	116	214.4	98.4
9	26.4	118	237.6	119.6
10	26	120	260	140
11	25.6	122	281.6	159.6
12	25.2	124	302.4	178.4
13	24.8	126	322.4	196.4
14	24.4	128	341.6	213.6
15	24	130	360	230
16	23.6	132	377.6	245.6
17	23.2	134	394.4	260.4
18	22.8	136	410.4	274.4
19	22.4	138	425.6	287.6
20	22	140	440	300
21	21.6	142	453.6	311.6
22	21.2	144	466.4	322.4
23	20.8	146	478.4	332.4
24	20.4	148	489.6	341.6
25	20	150	500	350
26	19.6	152	509.6	357.6
27	19.2	154	518.4	364.4
28	18.8	156	526.4	370.4
29	18.4	158	533.6	375.6
30	18	160	540	380
31	17.6	162	545.6	383.6
32	17.2	164	550.4	386.4
33	16.8	166	554.4	388.4
34	16.4	168	557.6	389.6
35	16	170	560	390
36	15.6	172	561.6	389.6