A monopolist has a linear MC of MC = 2Q + 16. It faces a linear demand of P = 160 – Q. a) Find the equation of the MR. Use this to find the profit maximizing quantity and price for the monopolist. (1 point)
A monopolist has a linear MC of MC = 2Q + 16. It faces a linear demand of P = 160 – Q.
a) Find the equation of the MR. Use this to find the profit maximizing quantity and price for the monopolist. (1 point)
b) Draw a diagram with the market demand, MR and MC. Specifically label the answers to (a) in this diagram, then use the diagram, and possibly some additional calculations, to find the exact value of the welfare loss from the monopoly. (1 points)
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