Answer to Question #264695 in Economics of Enterprise for Liddy

Question

Consider a monopolistic competitor who has the following demand function p=140-4Q.In additionsuppose that his total cost function is given Tc=10+5Q² . Find his equilibrium price and quantity

Answer 1

demand function p=140-4Q

total cost function is given Tc=10+5Q² 

MR$=$ MC;

MC$=10Q;$

$MR=((140-4Q)×Q )'=(140Q-4Q^2)'=140-8Q;$

$10Q=140-8Q; 18Q=140;$

$Q=$ $7.8;$

$P=140-8×7.8; P=140-31.2;$

$P=$ $$108.8;$