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Finding optimal output level

Answer the next question on the basis of the following information for a firm operating in an imperfectly competitive market:

Output------------Price------------Total Cost

----0--------------$500---------------$250
----1--------------$300---------------$260
----2--------------$250---------------$290
----3--------------$200---------------$350
----4--------------$150---------------$480
----5--------------$100---------------$700

How many units would the above profit-maximizing monopolist produce? Explain

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Please refer attached file for better clarity of table.

Solution:

Output Q Price, P Total Revenue Total Cost Marginal Revenue Marginal Cost Profit
TR=P*Q TC MR* MC** TR-TC
0 500 0 250 -250
1 300 ...

Solution Summary

Solution describes the steps to find optimal output level and associated profit.

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