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Calculate marginal revenue and marginal cost

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Assignment:

A brand is operated by a company that has a monopoly on sales of a given product. Assume that the demand is given by the following function:

P = 210 - X

Where P is the price and X like the quantity produced.

The costs incurred during production are as follows:

C(X) = 1000 + 10X + 1.5X2

  1. Calculate marginal revenue and marginal cost.
  2. What price should the producer make if he wants to make the profit as high as possible, and what will be the corresponding quantity? Please illustrate in a figure.
  3. What will be the company's profit?
  4. What will be the price elasticity of the adjustment you found in question number 2?
  5. Now suppose that is served by many small firms, but that the costs do not change in relation to the cost function above; What will be the market price and turnover quantity if we have free competition on the turnover of the product?
  6. How is social economic profit affected by the transition from monopoly to free competition? Show your answer with relevant calculations.

Reference no: EM133436075

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