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Problem I.

Suppose the inverse demand function for a monopolist’s product is given by P=150-2Q and the total cost function is given by TC=100+30Q.

  1. Determine the profit-maximizing price and quantity.
  2. Determine the maximum profits.

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Related questions

Problem II. Suppose the inverse demand function for a monopolistically competitive firm’s product is given by P = 100 - 2Q and the cost function is given by TC=52 + 4Q.

1. Determine the profit-maximizing price and quantity.

2. Determine the maximum profits.

3. Can we say that this firm is operating in the long-run or short-run equilibrium at the equilibrium price and quantity?

10. A monopolist’s inverse demand function is P= 100 – Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1 (Q1) = 4Q1, and the marginal cost of producing at facility 2 is MC2 (Q2) = 2Q2.

a. Provide the equation for the monopolist’s marginal revenue function. 

b. Determine the profit-maximizing level of output for each facility.

c. Determine the profit-maximizing price.

Problem III.  Suppose the inverse demand for a monopolist’s product is given by P= 110-1/2Q.

The monopolist can produce output in two plants. The marginal cost of producing in plant 1 is MC1  = 3Q1, and the marginal cost of producing in plant 2 is MC2= 2Q2.

1. How much output should be produced in each plant to maximize profits?

2. What price should be charged for the product?

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