Purchase Solution

# Monopoly and Competition Problem

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The optimum market quantitiy in a competitive market if:
P=100-.5q
MR = 100-q
Ac= 10\$ per unit

Is this the way you calculate it? If not, how do you do it?

Profit =MC=MR

10 = 100-q
90 = q

How do you then calculate the quantity brought to market by a monopolist?

##### Solution Preview

The usual equilibrium of MR=MC is equally applicable to the monopolist. Here, MR = MC = AC.
Therefore, 100 - q = 10
or q = 100 - 10 = 90
At this point the monopolist produces and supplies output quantity q = 90. This is the only profit-maximizing condition for ...

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