Suppose a monopolist has TC = 40 + 10Q + Q2, and the demand curve it faces is p = 130 - 2Q. What is the monopolist's total cost (TC) at the profit-maximizing level of output? Select one: a. TC = 320 b. TC = 640 c. TC = 720 d. TC = 84
Added by Briana V.
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To do this, we can use the marginal revenue (MR) and marginal cost (MC) approach. MR = dTR/dQ = p + Q(dp/dQ) = 130 - 4Q MC = dTC/dQ = 10 + 2Q Setting MR = MC, we get: 130 - 4Q = 10 + 2Q Solving for Q, we get: Q = 24 So the monopolist's Show more…
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