# Managerial Economics - Optimal Output and Pricing

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Your local monopoly is considering selling several units of homogeneous product as a single package. A typical consumer's inverse demand function is P = 200 - 4Q. Marginal cost is $120.

a. Determine the optimal number of units to put in a package.

b. How much should the firm charge for this package?

https://brainmass.com/economics/pricing-output-decisions/managerial-economics-optimal-output-pricing-643325

#### Solution Preview

The monopoly maximizes its profit at the quantity where Marginal Revenue (MR) = Marginal Cost (MC).

To find MR, ...

#### Solution Summary

This solution shows how to use marginal analysis to calculate a firm's profit-maximizing Quantity and Price.

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