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Derive the monopoly profit-maximizing price and quantity

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A monopoly's short run total cost function is given by TC = FC + 2Q2. Its market demand is P = 360 - 2Q.

A) Please derive the monopoly's profit-maximizing price and quantity.

B) Fully explain fully whether the output of Q = 70 is socially efficient. If it is, fully explain why. If it isn't, fully explain what is true that at Q = 70 that means it isn't, using the ideas from class.

C) Suppose now that FC is so large that when the firm maximizes profit in Part A) that the firm makes a loss. Using the information from Part A), explain whether the firm should stay open or not. Use the information in Part A) as appropriate but also explain the economic logic.

Reference no: EM132478824

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