Monopolists profit maximizing level of output
Business Economics
For the next five questions, consider a monopolist. Suppose the monopolist faces the following demand curve: P = 180 – 4Q. Marginal cost of production I is constant and equal to $20, and there are no fixed costs. What is the monopolist’s profit maximizing level of output?
a) q=45
b) q=40
c) q=30
d) q=20
e) q=10
f) none of above
1. What price will the profit maximizing monopolist charge?
a) p=100
b) p=20
c) p=60
d) p=180
e) p=80
f) p=none of the above
2. How much profit will the monopolist make if she maximizes her profit?
1600
3200
400
1200
800
None of the above
3. What is the value of the consumer surplus?
400
150
1600
600
512.5
None of the above
