What are the monopolists profit-maximizing price

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6. Consider once again the microchip market. Demand for microprocessors is given by P 35 5Q, where Q is the quantity of microchips ( in millions). The typical firm's total cost of producing a chip is Ci 5qi, where qi is the output of firm i. a. Suppose that one company acquires all the suppliers in the industry and thereby creates a monopoly. Illustrate what are the monopolist's profit-maximizing price and total output?

Suppose that, over the short run ( say, the next five years), demand for OPEC oil is given by Q 57.5 .5P or, equivalently, P 115 2Q. ( Here Q is measured in millions of barrels per day.) OPEC's marginal cost per barrel is $ 15. a. What is OPEC's optimal level of production? What is the prevailing price of oil at this level?

 

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