Assume that a monopolist sells a product with a total cost


Assume that a monopolist sells a product with a total cost function TC=1200 + 0.5Q2 and a corresponding marginal cost function MC = Q. The market demand curve is given by the equation P = 300-Q. a. Find the profit- maximizing output and price for this monopolist. Is the monopolist profitable? b. Calculate the price elasticity of demand at the monopolist’s profit- maximizing price. Also calculate the marginal cost at the monopolist’s profit- maximizing output. Verify that the IEPR holds.

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Microeconomics: Assume that a monopolist sells a product with a total cost
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