Materials from Class - 2021-9 > Wed 12/8

Daily exercise on monopoly profit maximization

A profit-maximizing monopolist has a total cost equation given by `TC=10Q` and faces a market demand curve given by `WTP=20-Q`.Its optimal Q is between 3 and 6, inclusive.

  1. Please determine the monopolist's optimal Q.
  2. What price should it charge? What profit does it earn at that point?

Please scan and submit your answer.

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Peter J Wilcoxen, The Maxwell School, Syracuse University
 Revised 12/08/2021