What quantity should this firm produce

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Reference no: EM131101456

Suppose a monopolist produces according to the following demand curve: P = 200 - 4 Q. Assume that the firm faces a constant marginal cost and constant average total cost of $56 per unit produced.

a) Write down the equation for the Marginal Revenue curve.

b) Graph this, including the demand curve, the MR curve, and the AC/MC line.

c) What quantity should this firm produce?

d) What price should it charge per unit?

e) What profit will it make, taking into account your answers in parts b and c?

Reference no: EM131101456

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