Essay
Consider a monopolist that has a total cost curve of TC = 110Q - (0.25)Q2.The market demand equation is Qd = 155 - P.
(A)What are the total revenue,marginal revenue,marginal cost,equilibrium quantity,equilibrium price,and profits for the monopolist in this market?
(B)Suppose the government instructs the firm to produce using average cost pricing.What are the equilibrium quantity,equilibrium price,and profits?
(C)Suppose further that the government wants the firm to produce where supply equals demand.What will be the equilibrium quantity,equilibrium price,and profits?
Correct Answer:
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Price can be written as P = 155 - Q.
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(A...
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