Monopoly firm faces demand curve

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Reference no: EM131093058

A monopoly firm faces a demand curve given by the following equation: P = $500 − 10Q, where Q equals quantity sold per day. Its marginal cost curve is MC = $100 per day. Assume that the firm faces no fixed cost.

How much will the firm produce?

How much will it charge?

Can you determine its profit per day? (Hint: you can; state how much it is.)

Suppose a tax of $1,000 per day is imposed on the firm. How will this affect its price?

How would the $1,000 per day tax affect its output per day?

How would the $1,000 per day tax affect its profit per day?

Show your work.

Reference no: EM131093058

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