Question

I have the solution, I just need to make sure that my graph is correct.

5. A monopolist faces the total revenue schedule TR = 4350q - 13q2 and the total cost schedule TC = 93 – 5.5 q2 + 150 q. Find it's profit-maximizing level of output. In a graph, draw its average revenue (AR), marginal revenue ( MR) and marginal cost (MC) functions and indicate the profit-maximizing level of output and price.

Answer 1

The profit maximizing level for a Monopolist is the quantity at which MC= MR.

plotting the graph. :

MC: 392119 7150 MR = 4350 -269 4350 - 269 = 399-119 +150 4350 -150 – (26-416) -34-0 4200 -159-39% =0 39° +159-4200 = 0 q: 35 At q = 35 Price - AR=4350-13 (35) = 3895.

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mr = 4350 - 269. MR 143501 o 11750 9 10 1 167.3 100 AR: 43.50 – 139 ART 435010 1 1950140 90 33462 | 200 300 MC = 392-112 +150 MC | 1sol 3400 1100 qlo 35 | 50 MC/MRI ARIS anc 7000 6000 I profit maximizing level 5000 42501 4000 t 3895 3440 fm. 3000 200 1000 i MR 10 WAR bedded 150 200 250 to 350 400 3550 100 14

MC intersects MR at Q= 35 corresponding to which the price on the AR is 3895