A monopolist faces the following demand curve:


The monopolist has total fixed costs of $40 and a constant marginal
cost of $5. What is the profitmaximizing level of output?
Select one:
?a. 31 units
?b. 7 units
?c. 16 units
?d. 23 units
P  Q  TR  MR  FC  VC  TC  Profit 
10  5  50  40  25  65  15  
9  10  90  8  40  50  90  0 
8  16  128  6.33  40  80  120  8 
7  23  161  4.71  40  115  155  6 
6  31  186  3.13  40  155  195  9 
5  45  225  2.79  40  225  265  40 
4  52  208  2.43  40  260  300  92 
3  60  180  3.50  40  300  340  160 
MC of n the unit=(TC of n units TC of p units )/(np)...............n>p
TR=P*Q
MR of n th unit=(TR of n units TR of p units)/(np)...................n>p
profit=TRTC
profit is maximum at MR=MC or the closest lower MC
where Q=16 units
Option c
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