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Assume that a monopolist faces a demand curve for its product given by: p = 120 - q. Further...

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Assume that a monopolist faces a demand curve for its product given by: p = 120 - q. Further assume that the firm's cost function is: TC = 580 + 11q. How much output should the firm produce at an optimal price?

Monopoly

A monopoly market one in which one firm produces all the products. There are significant barriers to entry into the market, so one firm is free to price its product to maximize its profit.

Answer and Explanation: 1

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Total Revenue (TR) is the demand equation times Q

{eq}TR = PQ = 120Q - Q ^ 2 {/eq}.

To maximize profit a firm operates where MR = MC.

MR is the...

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What is a Monopoly in Economics? - Definition & Impact on Consumers

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Chapter 7 / Lesson 2
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Understand the meaning of a monopoly in economics and what it does. Also, know the characteristics of a monopoly and the different types of monopolies.


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