Consider the demand curve P = 200 - Q facing a monopolist. The monopolist's cost function is given by C = 40Q. The monopolist is currently producing Q = 90 and charging a price of P = $110 and making a profit of $6300. Which of the following statements is CORRECT? The monopolist is not maximizing profit. To maximize profit, the monopolist should produce Q = 80 and charge a price of $120. Doing so would generate profit of $6400. The monopolist is not maximizing profit. To maximize profit, the monopolist should produce Q = 80 and charge a price of $120. Doing so would generate a profit of $7200. The monopolist is maximizing profit. The monopolist is not maximizing profit. To maximize profit, the monopolist should produce Q = 100 and charge a price of $100. Doing so would generate a profit of $7000.
Consider the demand curve P = 200 - Q facing a monopolist. The monopolist's cost function is given by C = 40Q. The monopolist is currently producing Q = 90 and charging a price of P = $110 and making a profit of $6300. Which of the following statements is CORRECT? The monopolist is not maximizing profit. To maximize profit, the monopolist should produce Q = 80 and charge a price of $120. Doing so would generate profit of $6400. The monopolist is not maximizing profit. To maximize profit, the monopolist should produce Q = 80 and charge a price of $120. Doing so would generate a profit of $7200. The monopolist is maximizing profit. The monopolist is not maximizing profit. To maximize profit, the monopolist should produce Q = 100 and charge a price of $100. Doing so would generate a profit of $7000.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter9: Monopoly
Section: Chapter Questions
Problem 15SQ
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Transcribed Image Text:Consider the demand curve P = 200 - Q facing a monopolist. The monopolist's cost
function is given by C = 40Q. The monopolist is currently producing Q = 90 and
charging a price of P = $110 and making a profit of $6300. Which of the following
statements is CORRECT?
The monopolist is not maximizing profit. To maximize profit, the monopolist should
produce Q = 80 and charge a price of $120. Doing so would generate profit of $6400.
The monopolist is not maximizing profit. To maximize profit, the monopolist should
produce Q = 80 and charge a price of $120. Doing so would generate a profit of $7200.
The monopolist is maximizing profit.
The monopolist is not maximizing profit. To maximize profit, the monopolist should
produce Q = 100 and charge a price of $100. Doing so would generate a profit of $7000.
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