Determining the Optimal Price and Output Combination
1. A firm under monopolistic competition faces the demand curve: P = 500 - 12.5Q. The firm's marginal cost is MC = 200 + 5Q. a. Find the firm's profit-maximizing output and price. b. Assuming that the firm is at its long-run equilibrium position, estimate total revenue, total cost, and total profit. 2. A monopolist faces th