Suppose a monopolist faces a market demand of P = 48 - 4Q. The monopolist has...
Suppose a monopolist faces a market demand of P = 48 - 4Q. The monopolist has a constant marginal cost of 8 per unit. If the monopolist can only charge a single price to consumers, how many units should the monopolist produce to maximize profits?
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10 |
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5 |
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12 |
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6 |
Homework Answers
Monopoly
P=48-4Q
TR=PQ
=(48-4Q)Q
=48Q-4Q2
MR=dTR/dQ
=48-8Q
MC=8
Monopoly profit maximizing condition is
MR=MC
8=48-8Q
8Q=48-8
Q=40/8
Q=5
Hence option second is the correct answer.
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