Question: Suppose that the inverse demand function for a monopolists product is p = 9 - Q/20. Its cost function is C = 10 + 10Q

Suppose that the inverse demand function for a monopolist’s product is p = 9 - Q/20. Its cost function is C = 10 + 10Q - 4Q² + 2/3 Q³. Draw marginal revenue and marginal cost curves. At what outputs does marginal revenue equal marginal cost? What is the profit-maximizing output? Check the second-order condition, d²π/dQ², at the monopoly optimum.

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Total revenue is TRQ p Q 9 Q20 Q 9Q Q 2 20 therefore marginal rev... View full answer

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