Answered

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You are the manager of a monopoly that faces a demand curve described by P = 63 − 5Q. Your costs are C = 10 + 3Q. The profit-maximizing output for your firm is:

Sagot :

Answer:

Profit-maximizing output = 6 units

Explanation:

Given:

Demand curve =  P = 63 − 5Q

Cost C = 10 + 3Q

Find:

Profit-maximizing output

Computation:

In monopoly maximum profit stand where;

MR = MC

So,

TR = P x Q

TR = (63 - 5q)Q

TR = 63Q - 5Q²

MR = d(TR) / dQ

So,

MR = d[63Q - 5Q²] / dQ

MR = 63 - 10Q

MC = dC / dQ

MC = d(10+3Q) / dQ

MC = 3

So,

Profit-maximizing output

MR = MC

63 - 10Q = 3

Q = 6

Profit-maximizing output = 6 units

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