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The inverse demand curve a monopoly faces is P = 10Q^-0.5The firm’s cost curve is  C(Q) = 5Q .What is the profit-maximizing solution

Category : Micro Economics | Answer: 1 2 Months Ago

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 We know MR = 5Q−1/2 and MC = 5. Set MC = MR and solve. We get Q* = 1, p* = 10, and profit =  10 − 5 = $5

2 Months Ago
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