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Monopoly/Oligopoly

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Online Economics Managerial class using Michael Baye's 5th edition book.

You are the manager of a monopoly, and your demand and cost functions are given by
P = 200 - 2Q and C(Q) = 2,000 + 3Q2, respectively.

a. What price-quantity combination maximizes your firm's profits?

b. Calculate the maximum profits.

c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price-quantity combination?

d. What price-quantity combination maximizes revenue?

e. Calculate the maximum revenues.

f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price-quantity combination?

Please see attached for full question.

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Solution Summary

Monopoly/Oligopoly problems are solved.

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