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A monopolist faces an inverse demand of p(y)=300-3y, and its total cost of production is c(y)=30y,...

A monopolist faces an inverse demand of p(y)=300-3y, and its total cost of production is c(y)=30y, where y is the output level. Calculate the x-intercept of the monopolist's marginal revenue curve.

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Answer #2

Answer :

p(y) = 300 - 3y

This is the inverse demand curve faced by the monopolist

Revenue curve = p(y) * y = 300y - 3y^2

Marginal revenue we get by differentiating the revenue curve with respect to y

Thus : Marginal revenue = 300 - 6y

The MR curve is thus : MR = 300 - 6y

We get the x-intercept of this curve by making the left hand side to be zero.

So : 0 = 300 - 6y

6y = 300

y = 300/6 = 50

Answer : x-intercept of the monopolist's marginal revenue curve is 50

answered by: anonymous
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