Let's assume a firm's inverse demand curve and cost equation is given below:...

Question:

Let's assume a firm's inverse demand curve and cost equation is given below: P=175-2QC=400+50Q+0.5Q{eq}^2 {/eq}. Find the optimal quantity, price, and profit. With quantity on the x-axis and price on the y-axis, graph the inverse demand, marginal revenue, and marginal cost curves. Show the optimal price and quantity on the graph.

Profit maximization

A market is said to be monopoly market in which there is only one seller of a good having all market power. The profit maximization condition in this market is MR = MC

Answer and Explanation: 1

Become a Study.com member to unlock this answer!

View this answer

P = 175 - 2Q

TR = P * Q = 175Q - 2Q{eq}^2 {/eq}

MR = 175 - 4Q

TC = 400 + 50Q + 0.5Q{eq}^2 {/eq}

MC = 50 + 1Q

The profit maximization condition...

See full answer below.


Learn more about this topic:

Loading...
Profit Maximization: Definition, Equation & Theory

from

Chapter 24 / Lesson 6
42K

Learn the profit maximization definition, its importance, and explore the profit maximization theory. See how to calculate profit maximization with examples.


Related to this Question

Explore our homework questions and answers library