Find the profit mazimizing quantity in a single price monopoly

Question

Price = 180 , 170 , 160, 150, 140, 130 where Quantity = 1,2,3,4,5 where Total Cost = 25, 150, 285, 430, 585, 750 Find the profit mazimizing quantity and price (this is a single priced monopoly)

Answer 1

The profit-maximizing quantity and price can be found where MR = MC. The last time when MR >= MC is at a quantity of 3. The corresponding profit-maximizing price at a quantity of 3 is $160. Profit is found by taking Total Revenue minus Total Costs.

Total Revenue = 3 * $160 = $480

Total Cost (at a quantity of 3) = $285

Profit = $480 - $285 = $195

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