question archive A monopolist producing a single commodity has a production function given by q = ( x) where q is the quantity produced and x is the amount of the sole input used
A monopolist producing a single commodity has a production function given by q = ( x) where q is the quantity produced and x is the amount of the sole input used
Subject:MathPrice: Bought3
A monopolist producing a single commodity has a production function given by q = ( x) where q is the quantity produced and x is the amount of the sole input used. The monopolist can buy any amount of the input at the per unit price of 2, and faces an industry (inverse) demand function given by p = 30 - 3q , where p is the price per unit of the output. Assume there are no fixed costs. If all output is sold and the production level is set to maximise profits, what will the market price be? Also derive an expression for the marginal revenue product of the input.
