Question #86696

suppose that the demand equation for delmonte, amonopolist is given by p=400-20Q cost equation is given by TC=500+20Q2.find the profit maximizing price and output for the monopolistic

Expert's answer

The profit maximization condition is equality MC = MR.

Find the MS and MR from these equations;

TR=Q*P=400Q-20Q2

MR=(TR)'=400-40Q

MC=(TC)'=40Q

40Q=400-40Q

80Q=400

Q=5

P=400-20*5=300

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