Barbara is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue curve, and total cost curve are given as follows: Q = 160minus4P TR = 40Qminus0.25Q2 MR = 40minus0.5Q TC = 4Q MC = 4 Refer to Scenario 1. The price of her product will be

A. $32.

B. $4.

C. $42.

D. $22.

E. $72.

Question

Business

Aylin Zavala

14 May, 23:48

Barbara is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue curve, and total cost curve are given as follows: Q = 160minus4P TR = 40Qminus0.25Q2 MR = 40minus0.5Q TC = 4Q MC = 4 Refer to Scenario 1. The price of her product will be

A. $32.

B. $4.

C. $42.

D. $22.

E. $72.

+2

Answers (1)

Know the Answer?

Makhi Powell · Answer 1

D

Explanation:

Profit is Maximize when MR = MC

since MR=40 - 0.5Q

and MC = 4

Therefore:

40-0.5Q = 4

-0.5Q = 4 - 40

-0.5Q = - 36

divide through by - 0.5

Q = 72

since Q = 72

from Q = 160 - 4p

72 = 160 - 4P

-4p = 72 - 160

-4P = - 88

divide through by - 4

P = 22