Homework Answers
Answer
1)
Monopoly produces at MR=MC
to find MR converting the demand function
Q=12-2P
2P=12-Q
P=6-0.5Q
MR=6-Q
MC=cjhnage in total cost =diffrentiation of the TC
MC=dTC/dQ=2Q
the profit is maximum at MC=MR
2Q=6-Q
3Q=6
Q=2 units
the firm produces 2 units to maximize
2)
P=6-0.5*2=5
the firm charge price $5
3)
Profit=TR-TC
TR=P*Q
=5*2=10
TC=2+2^2=6
Profit=10-6=4
the profit is $4
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