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State the exact monopolist equilibrium price

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Reference no: EM133063895

Suppose a certain city has a monopoly cable-television company.  This company has total costs TC = 0.25Q2 + 30Q + 70. (Hint: using calculus, this means MC = 0.5Q + 30 since MC is the derivative of TC with respect to output.) 

The demand in the community is approximated by the equation Qd = 60 - P/2 (alternatively, you can write the demand equation as Qd = 60 - 0.5P). 

  1. Graphically depict the demand curve as well as the marginal cost (MC) curve.
  2. If the cable company is free to choose its own price Pm and quantity Qm, graphically depict the monopoly equilibrium price and quantity.  Add any other curve(s) to your diagram that may be required to obtain this outcome.
  3. Compute and state the exact monopolist equilibrium price Pm and quantity Qm that you depicted graphically.

Please help to understand and solve calculation and graph for each 3 points separately

Reference no: EM133063895

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