Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 17

You are the manager of a monopoly, and your demand and cost functions are given by P = 300 - 3 Q and
C ( Q ) = 1,500 + 2 Q 2 , respectively.
a. What price-quantity combination maximizes your firm's profits?
b. Calculate the maximum profits.
c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price-quantity combination?
d. What price-quantity combination maximizes revenue?
e. Calculate the maximum revenues.
f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price-quantity combination?