Follow-Up Question Regarding Solving for Price and Quantity
For monopoly set the price when MC=MR
For calculating MR first write the equation for total revenue (TR)
TR=P*Q = (800-5Q)*Q --------(1)
Differentiate (1) w.r.t. Q to get MR
MR=dTR/dQ = 800 - 10Q----------(2)
MC = 15Q
Equate MC and MR, we get Q = 32
Put this in equation for P to calculate P, P=640
The above response was very helpful, however I am still having trouble figuring out the precise method used for solving for Q. What is the formula used to equate MC and MR?
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Solution Summary
The solution assists with solving the price and quantity.
$2.19