1. The demand and cost curves for a monopoly firm are as follows:
Q = 750 - 5P
TC = 2000 + 70Q
(a) At what output and price will the firm maximize total revenue?
(b) At what output and price will the firm maximize total profit?
(c) Compare the maximum profit obtainable with the profit that the firm would have if it chose a revenue-maximizing strategy.
1. The demand and cost curves for a monopoly firm are as follows:
Q = 750 - 5P
TC = 2000 + 70Q
(a) At what output and price will the firm maximize total revenue?
(b) At what output and price will the firm maximize total profit?
(c) Compare the maximum profit obtainable with the profit that the firm would have if it chose a revenue-maximizing strategy.
Related textbook solutions
Related questions
Given following Price and Total Cost functions:
P = 120 - 7Q
TC = 40 + 70Q - 10Q2 + 0.6Q3
Where P = price, and Q is output.
Fill in the table below and answer the questions below the table.
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Q |
P |
FC |
TVC |
TC |
TR |
Profit |
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If your company's goal is to maximize profit, answer the following questions below:
What price will you charge for your product?
What quantity will you produce?
And what would be your maximum profit or minimum loss at the price and output you chose?
2. If your company's goal is to maximize total revenue, answer the following questions below:
What price will you charge for your product?
What quantity will you produce?
And what would be your maximum total revenue at the price and output you chose? (3 points)
Question 3
Given a firm with the following cost data, fill in the table below.
Q = OUTPUT TFC = Total Fixed Cost AVC = Average Variable Cost ATC = Average Total Cost TVC = Total Variable Cost MC = Marginal Cost TC = Total Cost
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Q |
FC |
TVC |
TC |
AVC |
ATC |
MC |
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0 |
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10 |
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10 |
10 |
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