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Suppose the demand curve for a monopolist is Q D = 47,000 - 50 P, and the marginal revenue function is MR = 940 - 0.04 Q . The monopolist's Marginal Cost = 40 + 0.02Q and its
Total Cost = 250,000 + 40Q + 0.01Q 2.
a. Find the monopolist's profit - maximizing output and price.
b. calculate the monopolist's profit/losses, if any.
c. What is the Lerner Index for this industry at the monopolist's profit - maximizing output and price?
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