00:01
So here we're told a whole bunch about monopolist.
00:02
The demand curve is p equals 120 minus q.
00:07
That makes the marginal revenue curve 120 minus 2q, right? basic differential calculus there.
00:13
Total cost is equal to a half q squared plus 40.
00:18
And that again means with calculus, the marginal cost is equal to q.
00:22
Let's plot this.
00:23
It's never a bad idea to sketch what you're doing because it may help you visualize the problem.
00:31
We have a demand curve.
00:33
We have a marginal revenue curve, and we have a marginal cost curve, right? the monopolist wants to price where marginal revenue is equal to marginal cost.
00:43
That's the basic idea of the monopolist decision.
00:47
Keep producing until the money you bring in from selling one more unit equals the money you lose from one more unit, right? so if we equate marginal revenue equals to marginal cost, we get 120 minus 2q is equal to q.
01:02
We get 3q is equal to 120...