### What are the maximum profits

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Question: Marion the monopolist faces the following demand function: Q = 22,000 - 8P. She faces the following cost function: TC = 5,000,000 + 140Q.

Calculate the price and quantity at which profits are a maximum.

What are the maximum profits?

Graph the demand, marginal revenue, marginal cost and average cost functions.

Shade in the area that represents the profits of the firm.

Now assume that regulators have decided to regulate Marion so that price = average cost. What price and quantity does this correspond to?

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