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Calculate the monopolists profit

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Reference no: EM13849207

Suppose the demand curve for a monopolist is QD = 500 - P, and the marginal revenue function  is MR = 500 - 2Q. The monopolist has a  constant  marginal and average total cost of $50 per unit.

a. Find the monopolist's profit-maximizing output  and price.

b. Calculate the monopolist's profit.

c. What is the Lerner Index for this industry?


The following graph shows a firm in a monopolistically competitive industry.



2408_14.png


a. Show the firm's short-run profit-maximizing quantity and price. Is the firm making a profit?

b. Carefully explain what will happen in the industry over time, and draw a graph of a  monopolistically competitive firm in long-run equilibrium.

Reference no: EM13849207

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