Thursday, August 11, 2011

Determine price a monopolist sell?

Suppose a monopolist with constant average and marginal cost of $10 (AC = MC = $10), faces a demand curve given by, P = 30 - Q. What quantity does the monopolist produce and what is the price it is sold at? (Recall that marginal revenue can be determined with the formula, MR = P + Q(dP/dQ)).

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