A monopolist faces the following cost structure for its product:
TC(Q) = 6000 + 300 Q + 5 Q2
MC(Q) =
300 + 10 Q
It also faces the following demand function:
QD = 180 – 0.2 P
Determine the following:
1. Profit-maximizing price and quantity under uniform pricing
2. Price and quantity that would result from forcing the monopolist to produce where marginal cost meets the demand curve.
3. Dead-weight loss to society (of allowing uniform pricing by the monopolist) as a proportion of monopoly profit.
Given: MCC Q) = 300+ 10QQD = 180 – 0. 2 Pto find the marginal revenue, me nullrequire total revenue first .TR(Q ) = P. QD 1 “= 180P – 0. 2Pzor= Q 90 0 – 5QJ= 900Q -502therefore , MR (…
