Problem VII: The average total cost of a monopolistic rm is ATC = 80/Q +20Q. The firm is facing the demand function given by P = 6000 - 20Q.
a) What will be the total profit that this rm will generate if it chooses price and quantity optimally? (Prot=224920)
b) What would be the profit of this rm if it behaved competitively? (Prot=199920)
c) What would be the long run equilibrium price if this market was competitive? (80)
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