Question

Suppose a monopolist has TC = 100 + 10Q + 2 Q2, and the demand curve it faces is p = 90 -2Q. What will be the price, quantity, and profit for this firm?

          Suppose a monopolist has TC = 100 + 10Q + 2 Q2, and the demand curve it faces is p = 90 -2Q. What will be the price, quantity, and profit for this firm?
        

Added by Celia L.

Principles of Economics
Principles of Economics
Gregory Mankiw 8th Edition
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Suppose a monopolist has TC = 100 + 10Q + 2 Q2, and the demand curve it faces is p = 90 -2Q. What will be the price, quantity, and profit for this firm?
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Transcript

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00:01 So here we have a monopoly.
00:02 And in this monopoly, we are given a total cost curve that is 100 plus 10q plus 2q squared.
00:11 So immediately i want to get the marginal cost, which is the derivative of total cost with respect to quantity.
00:18 And that's going to be 10 plus 4q.
00:22 That's the definition of marginal cost.
00:23 We also have a demand curve.
00:25 P is equal to 90 minus 2q.
00:28 So here i want to get a revenue function, right? and revenue, which is just r, is price times quantity.
00:38 So revenue is 90 minus 2q times q, right? that's the definition of revenue.
00:45 Marginal revenue is the derivative of revenue with respect to quantity, and that'll be 90 minus 4q.
00:54 So if i was to graph this, right, in terms of quantity, and price...
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