A monopolist’s demand function is P = 1624 – 4Q, and its total cost function is (5 marks) TC = 22,000 + 24Q -4Q2 + 1/3 Q3, where Q is output produced and sold. i. At what level of output and sales (Q) and price (P) will total profits be maximized? ii. At what level of output and sales (Q) and price (P) will total revenue be maximized? iii. At what price (P) should the monopolist shut down?

/in /by

A monopolist’s demand function is P = 1624 – 4Q, and its total cost function is
(5 marks)
TC = 22,000 + 24Q -4Q2 + 1/3 Q3, where Q is output produced and sold.
i. At what level of output and sales (Q) and price (P) will total profits be
maximized?
ii. At what level of output and sales (Q) and price (P) will total revenue be
maximized?
iii. At what price (P) should the monopolist shut down?

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