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Price-Quantity Combination to Maximize Profit

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

You are the manager of a firm that produces a product according to the cost function
2 3
C(qi ) = 100 +50qi - 4q i + qi . Determine the short-run supply function if:

a. You operate a perfectly competitive business.
b. You operate a monopoly.
c. You operate a monopolistically competitive business.

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Solution Summary

This job emphasizes maximum revenues.