Question

You are the manager of a monopoly that faces a demand curve described by p = 230 – 20q. your costs are c = 5 30q. the profit-maximizing price is: ________
a) 110.
b) 90.
c) 130.
d) 150.

Answers

  1. Since as a manager of a monopoly that faces a demand curve described by p = 230 – 20q. the profit-maximizing price is option C. 130.

    What is the monopoly about?

    A monopoly is known to be a term that describe a market that does not with the “absence of have competition”, and it is one that forms a situation where a given person or firm is the only supplier of a given product of thing
    Note that In monopoly, Profit is maximized if MR = MC and where MR  =  marginal revenue.
    So Revenue R =  Q * P
    =  230Q – 20Q ^2
    MR  =  DR/DQ  =  230 –  40Q
    In regards to all -profit maximization
    MR =  MC
    230 – 40Q =  30
    40Q =  200
    Q =  5
    Hence: Profit-maximizing Price P:
    =  230 – 20 * 5
     =  130.
    Therefore, Since as a manager of a monopoly that faces a demand curve described by p = 230 – 20q. the profit-maximizing price is option C. 130.
    Learn more about monopoly from
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