2. Assume that Apple has a monopoly in the market for iPads (assume there are no...

 

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2. Assume that Apple has a monopoly in the market for iPads (assume there are no close substitutes and barriers to entry). The marginal cost of production for an Apple iPad is constant at $200 per unit, and suppose demand is given by Q = 200 -0.2P, where quantity is measured in millions and price in dollars. a. Derive the marginal revenue curve (MR) from the demand curve. b. Set marginal revenue equal to marginal cost and solve for quantity. c. Find the profit maximizing price. d. Illustrate the profit-maximizing price and output for this monopolist in a graph (a rough sketch), showing the demand curve, the MR curve and the MC curve. 2. Assume that Apple has a monopoly in the market for iPads (assume there are no close substitutes and barriers to entry). The marginal cost of production for an Apple iPad is constant at $200 per unit, and suppose demand is given by Q = 200 -0.2P, where quantity is measured in millions and price in dollars. a. Derive the marginal revenue curve (MR) from the demand curve. b. Set marginal revenue equal to marginal cost and solve for quantity. c. Find the profit maximizing price. d. Illustrate the profit-maximizing price and output for this monopolist in a graph (a rough sketch), showing the demand curve, the MR curve and the MC curve.