A monopolist operates in an industry where the demand

A monopolist operates in an industry where the demand curve is given by Q = 1000 - 20P. Themonopolist’s constant marginal cost is $8. What is the monopolist’s profit-maximizing price.

Here,

P =

TR = PQ =

So,

MR =

At profit maximizing,

MR = MC

·

· Q =420

Putting it in the demand curve gives,

P = = 29.

So the profit maximizing price is $29.

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