Econ 111: Principles of Economics- Accelerated Treatment - Quiz 5
A monopolist is facing a linear demand curve of Q = 200 - 2P, and MC= AC = 20.
a) Graph the average revenue (AR), marginal revenue (MR), and marginal cost (MC) curves for this monopolist. Make sure you mark all intercepts on your graph.
b) Which output quantity, Q*, maximizes profits for the monopolist? Why? Show Q* on your graph.
c) What are the monopolist's profits at Q*? Show these max. profits on your graph.