Find monopolist profit maximizing quantity and price

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Reference no: EM1375691

Where computations are required, please show step-by-step calculations used to arrive at your answer (s)

A monopolist has demand and cost curves given by:
QD = 10,000 - 20P
TC = 1,000 + 10Q + .05Q2

a. Determine the monopolist's profit-maximizing quantity and price.
b. Determine the monopolist's profit.

The following matrix shows the payoffs for an advertising game between Coke and Pepsi. The companies can choose to advertise or to not advertise. Numbers in the matrix represent profits; the first number in each cell is the payoff to Coke. (Numbers in millions.)

Coke (rows)/Pepsi (columns) Advertise Don't Advertise
Advertise (10, 10) (500, -50)
Don't Advertise (-50, 500) (100, 100)

a. Describe why this would be described as a Prisoner's Dilemma game.
b. Describe the probable outcome of this game.

Reference no: EM1375691

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