Imagine we have a monopolist who wants to maximize revenue rather than profit. She has the demand curve P = 72-Q, with marginal revenue MR = 72-2Q, and MC = 12.
(a) Graph the three functions.
(b) Calculate the price she should charge in order to maximize revenue. [Hint: where the MR = 0.] (c) Compare her total revenue with the revenue obtained under profit maximization.
(d) How much profit will she make when maximizing total revenue?