Question

Suppose there is only one supplier in the market for product X. The marginal cost of
producing product X is constant at $200 per unit and there is no fixed cost. The market
demand for product X is described by the following schedule:
Price Quantity
$800 5
700 6
600 7
500 8
400 9
300 10
200 11
Determine the profit-maximizing output quantity and the price of product X. Explain your
answer

Answer 1

Question #76228, Economics / Economics of Enterprise

Question: Suppose there is only one supplier in the market for product X. The marginal cost of producing product X is constant at $200 per unit and there is no fixed cost. The market demand for product X is described by the following schedule:

Determine the profit-maximizing output quantity and the price of product X.

There is a rule that the profit-maximizing choice for the monopoly will be to produce at the quantity where marginal revenue is equal to marginal cost (MR = MC).

Answer: P=$700, Q=6

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