Katrien runs a restaurant called the 'Heaven'. Given the popularity and location of the restaurant, she has a monopoly position in the market. The inverse market demand curve is given by Q = 120 - P/2. Katrien has a marginal cost of MC = 4Q and a fixed cost FC = $300. If she charges the same price to all customers, what are Katrien's profit-maximising price PM and quantity QM? [Extra practice: what profit does she make?]
(a) PM= $15; qM = 45 units.
(b) PM= $120; qM = 60 units.
(c) PM= $160; qM = 40 units.
(d) PM= $180; qM = 30 units.
(e) None of the above.